Activision Threatens to Drop PS3/PSP Support

[StorminNorman]

Sony should beware — Activision chief is not simply playing games (The Times) (http://business.timesonline.co.uk/tol/business/industry_sectors/media/article6531367.ece)

Essentially, Bobby Kotick, Activision CEO, is rattling sabers here, however he makes it pretty clear that Activision, who are the largest game publisher in the world, have nothing to lose from cutting Sony's consoles from their development process.

His reasoning is that the costs of developing for the PS3 are higher than for the 360 and the Wii, but offer less return on investment due to a lower installed base, which he believes is caused by the console's high price. Unless Sony cut the price in the next year or so, Activision may simply stop releasing games for it.

As anyone who owns a Dreamcast knows, lack of support from the biggest publisher in the world is pretty much a death sentence for a console.

What's perhaps most worrying for PS3 owners is that, while this is certainly an attempt to force Sony's hand, Sony aren't really in a position to cut the console's price. They're still losing money on every PS3 sold, and the company's general financial situation is still really bad. While they could drop the price of the PS3, it would really only hasten the death of SCEI and/or Sony itself.

While this may turn out to be little more than rhetoric, it may also turn out to be a pretty significant moment in gaming history. We shall see.

[FX-GTZ]

If activision did this, maybe we could see some better quality Wii titles, because they wouldnt be porting to 3 systems and have more time to polish and remove the bugs.

[Blob]

If activision did this, maybe we could see some better quality Wii titles, because they wouldnt be porting to 3 systems and have more time to polish and remove the bugs.

yeah but unless they were exclusives theyd still be the inferior version.

[Halt, Hammerzeit]

Do Activision make anything other GH games these days?

[Sweating Bullets]

Holy crap that would be crazy.

I think they did
Prototype, Call of Duty, Wolverine

[sausage]

Bobby Chokesondick fails at Economics. Yeah, let's neglect 20-30% of the gaming dollar; that'll work.

If I was Sony I wouldn't even waste my vomit.

[StorminNorman]

Sony responds to Activision's threats. (http://kotaku.com/5296976/sony-responds-to-activisions-threats-to-ditch-playstation)

[Munky]

Sounds like decent reasoning IMO.

Activision is a publicly traded company which has only one goal that is stated quite clearly in law.

To make the largest possible return for shareholders as possible.

If the ROI on PS3/PSP software isn't up to scratch then they should ditch them. It's basic management principles.

[Stevorooni]

Wow Activision really are becoming the new EA

[FX-GTZ]

Well it's easily better than seeing Activision fall under EA's name, what happened to all the companies EA bought? You dont hear of them ever, instead of saying Bioware or Pandemic Studios, you'll be saying EA.
(and many are)

[Adios]

Well it's easily better than seeing Activision fall under EA's name, what happened to all the companies EA bought? You dont hear of them ever, instead of saying Bioware or Pandemic Studios, you'll be saying EA.
(and many are)

Really? I haven't read or heard that anywhere.

[Pauly]

Sounds like decent reasoning IMO.

Activision is a publicly traded company which has only one goal that is stated quite clearly in law.

To make the largest possible return for shareholders as possible.

If the ROI on PS3/PSP software isn't up to scratch then they should ditch them. It's basic management principles.
/agree

i wonder if there is anything else going on behind the scenes though.

[StorminNorman]

There is. This is all about the licensing royalties Activision pays to Sony. Activision wants more in return for the money it's paying than Sony is giving them.

They're basically looking for Sony to provide the same level of support with regards to advertising/promotion/etc that Microsoft are giving them.

[Araenel]

Do Activision make anything other GH games these days?

lol are you serious? Activision are huge.

[Adios]

6 "Hero" games this year prove otherwise :p

[Lex]

proves otherwise to what?

[Sweating Bullets]

Interesting to see how this pans out over the next couple of months

[/backslash]

I got Acclaim & Activision mixed up and wondered why anyone would care :p Then I remembered that Acclaim shutdown a while ago and someone pointed out Guitar Hero

[Sweating Bullets]

Kotaku have an article about this:

http://www.kotaku.com.au/2009/06/monday-musings-activision-declares-war-on-sony/

So, Activision have threatened to pull support from the PlayStation 3. But what did they really mean?

It’s pretty clear what Activision CEO Bobby Kotick said in an interview with the UK’s Times newspaper:

“I’m getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they don’t make it easy for me to support the platform. It’s expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation.

“They have to cut the price, because if they don’t, the attach rates are likely to slow. If we are being realistic, we might have to stop supporting Sony… When we look at 2010 and 2011, we might want to consider if we support the console - and the PSP [portable] too.”

Kotick wants a PS3 price cut. And he’s threatening to pick up his ball - the largest ball in the industry - and go home unless he gets it.

Activision sells most of its games in the United States and in Europe. Western-focused games like Call of Duty and Guitar Hero sell best on Xbox 360 and Wii, respectively, in those territories. Activision doesn’t sell a lot of games in Japan. Sony is languishing in third place in the two territories in which Activision does the vast majority of its business.

So why does Kotick care? If the PS3 has lost momentum and the world’s biggest third-party publisher is getting a better return on the other two platforms, why does Kotick want a price cut?

Why doesn’t he just do what so many third-party publishers did to the Gamecube last generation and simply walk away?

The PS2 was ideal for third-party publishers. It was the clear winner last generation and it made things easy. You made your game for PS2 and then ported it elsewhere. You made all your sales on PS2. In effect, it was the only platform you had to worry about.

Thing is, Kotick knows that there are still tens upon tens of millions of PS2 owners out there who have yet to upgrade to the current console generation. And these PS2 owners are brand loyal to Sony. When they do upgrade, they’ll want a new PlayStation.

Right now, these PS2 owners see the PS3 price tag and say “Hey, I can wait”. They don’t care about the value of the system - about Blu-ray or wi-fi or free online play - they just see that price tag sitting at two or three times what they paid for their PS2.

Sony responded to Kotick’s bold statements with some PR fluff:

“PlayStation has tremendous momentum coming out of E3, and we are seeing positive growth with more than 350 titles slated to hit across all our platforms, including many anticipated games from our publishing partners. We enjoy healthy business relationships with and greatly value our publishing partners and are working closely with them to deliver the best entertainment experience.”

But you can bet that they’re worried.

But you can bet Microsoft was also given pause for thought. Kotick clearly doesn’t think the Xbox 360 is going to be this generation’s PS2. After all, if he did, why would he care about the fate of the PS3?

And there’s also doubt over whether the Wii will be this generation’s PS2. Even the world’s biggest third-party publisher still struggles to sell games that aren’t Guitar Hero on Nintendo’s console.

Activision has made an aggressive move. It’ll be interesting to see if Sony - or even Microsoft - can respond in kind.

What do you think will happen? What price do you think the PS3 needs to hit in order to start competing with the Wii and Xbox 360?

[igotnewsuper8systemWRONG!]

Yeah... this won't happen

[fearofthesky]

Think its more sabre-rattling then anything else.

In response to the questions asked at the end o' the Kotaku article:

Nothing.

500 bucks.

EDIT But if they bought back the Emotion Engine and therefore perfect BC, i'd go buy one now.

[Blob]

EDIT But if they bought back the Emotion Engine and therefore perfect BC, i'd go buy one now.

This..

[igotnewsuper8systemWRONG!]

Now that I have a ps3 I really couldn''t care less about BC, sure it would be nice but for now I'm ok with keeping my ps2 in action every once in a while.

[Creedy]

Activision never threatened to drop support Microsoft when there were 23 million X360's sold. This is so ****ing retarded.

Threatening to drop support and lose money from 23 million potential customers is retarded.

[Lex]

attach rate hurfdurf

[Blob]

Activision never threatened to drop support Microsoft when there were 23 million X360's sold. This is so ****ing retarded.

Threatening to drop support and lose money from 23 million potential customers is retarded.

Funny thing is for all 30 million xboxs sold how many have been bought by people who've gotten a replacement for their constantly rrod console? Xbox owners must just buy that many more games for the system...

[Slippery]

Activision never threatened to drop support Microsoft when there were 23 million X360's sold. This is so ****ing retarded.

Threatening to drop support and lose money from 23 million potential customers is retarded.

There's far more to it then that

- Sony probably (not definetly, im just going on their elitist attitude here) charge a significantly out of proportion amount to develop on the PS3 considering the smaller used base when compared to what MSoft will be charging for the 360 (again, nothing to back that up)

- The PS3 is much harder to develop for (Even Kutaragi in all his glory boasted this), so they need more staff, time etc all of which cost money

Paying proportionally more, to do something which will cost more in staff expenses is bad business practice - I don't really agree with public threats to drop support but it's not exactly going to result in higher PS3 prices

[ThePhotoshop]

Activision's games aren't the games I'd go out and buy a PS3 for. So for me, purely as a consumer, Activision leaving PS3 means SFA.

I would like a price cut though. The thing is just too damn expensive right now.

Surely the PS3 is doing much better in Japan?

[Creedy]

From what I understand the PS3 requires a lot of low level coding to get the best use out of it. I'm probably 100% wrong and I'm sure storminnormin could clear that up.

I've aso read that Sony dramatically dropped the prices of their dev kits recently too.

I'm pretty sure Sony are doing all that they can without putting themselves out of business.

[consoul]

It's an idle threat at any rate. Activision know as well as anyone in the industry that the price cut is coming.

[banjoeskimo]

Yeah, I'm with a lot of you guys here, sounds like a businessman's bluff to me. Besides, if this ever actually happened it'd be over in a couple of months tops; you can bet Sony would be doing everything they could behind the scenes to stop this from happening if it were a legitimate threat.

Also? Kotick's a dick, so he can shove it.

[JubeiSaotome]

Activision's games aren't the games I'd go out and buy a PS3 for. So for me, purely as a consumer, Activision leaving PS3 means SFA.

Unfortunatly, me too. Call of Duty just seems lame these days.

Any PR/CEO company to deny sales, because of personal reasons, proves that they are in the wrong job. Selling games is about selling games, not about choosing a team. Unless there's an exclusive contract, it's a moronic move.