Sony should beware- Activision dropping PS3 support?- Sony Responds (Again)

Jan 29, 2009
7,187
Bobby Kotick and a partner bought the once-struggling Activision for $440,000 in 1991, at a time when it was losing $30 million on $10 million in revenues. Now the world's biggest independent computer games company, it has a market value of $16 billion (£10 billion) and operating profits of $179 million in the first quarter on sales of $981 million.

Activision overtook Electronic Arts last July when it was in effect taken over by Vivendi of France in a deal where Vivendi injected World of Warcraft into the company for a 56 per cent stake. With such success, Mr Kotick, who runs the business from Beverly Hills, can probably get away with saying anything, which, soon enough, he does.

The target is Sony, the once-dominant hardware maker. “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,” he says.

It is not a very subtle hint, although Mr Kotick says his company paid $500 million to Sony in royalties and other goods last year, which “probably still worked out at 400 per cent of the profit they made”. Actually, Sony's games division lost $597 million last year, and Mr Kotick seems to think it may have to risk more losses if the £299.99 PlayStation 3 is to develop.

“They have to cut the price, because if they don't, the attach rates [the number of games each console owner buys] are likely to slow. If we are being realistic, we might have to stop supporting Sony.” Ask when and he says: “When we look at 2010 and 2011, we might want to consider if we support the console — and the PSP [portable] too.” Sounds like Sir Howard Stringer, Sony's chief executive, is going to have to call Mr Kotick pretty fast.

Activision is pretty fortunate in that it has ridden the trend away from traditional “shoot 'em up” titles to family-oriented, interactive games such as Guitar Hero, which grossed more than $1 billion last year. “It was as big as Titanic [the film] with better margins”.

DJ Hero, with its own turntable, will follow this year, although Activision will have to endure its main competitor, Viacom's Rockband, launching a Beatles-themed game.

But it is a trend that, unlike Nintendo, which practically reinvented gaming with the Wii, Sony has been slow to react to. To illustrate the point, Mr Kotick stands on a plastic skateboard that turns out to be the controller for Tony Hawk: Ride — the company's attempt to reignite the well-worn franchise. Using motion and infra-red sensors, the board detects movements in both the player's body and feet, and speed is generated by swiping a foot on the floor next to the board. It is hoped the title will be a blockbuster later this year.

“Such a physical interface could be ideal for Sony,” he says, building up the sales pitch, before he warns that he will “generate better returns on invested capital” on the Wii and the Microsoft console. If he can persuade Sony to bend to his will, then it will be a sign of how far the power in the computer games industry has changed.

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UPDATE:

Sony Europe has since commented: “We respect our third-parties’ opinions and their right to express those opinions but we will not be commenting on this story."

Meanwhile, Wedbush Morgan analyst Michael Pachter also chipped in, accusing Kotick of 'bluffing.' “Of course Bobby’s bluffing, and good for him,” he said in a phone interview.

“I think Bobby’s obviously interested in Sony selling as many PS3s as they possibly can, and he’s not happy with their penetration so far. I think he favours a price cut, and would rather see one sooner than later.”

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UPDATE 2:

SCEA responds to Activision's comments on PS3 support

Earlier today, Activision Blizzard’s Bobby Kotick talked about the possibility of cutting support and releases for the PS3 if there isn’t a price cut. SCEE then stated that while it “respects... third-parties’ opinions,” it “will not be commenting on this story.”

SCEA, on the other hand, responded with more than a "no comment," though the remarks are rather indirect and unconfrontational:

“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.”

This could be interpreted in a number of ways, but it seems the mention of 350 titles and other publishers signifies an official “whatever” from Sony.
 
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Jan 29, 2009
7,187
Wow, this doesnt sound good ... at all.

I can see them cutting back titles to extreme proportions but I doubt it would not want that COD money.
The PS3, PS2, and PSP together sold about 60% of their profits... yeah right they will drop sony...
 
Kind of makes me happy, without people speaking up Sony will continue to be on their stupid high horse!

They need to drop the price to move units otherwise they will continue to be in the same spot and their machines in the same place at the store.
 
Apr 17, 2009
7,731
San Diego, CA
sounds like someone needs a swift slap to the face. You're going to drop something that provides 60% of your profits because HD is harder to program than the same **** that's been here for 10 years. Obviously.
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thunda123

Premium Supporter
They should go ahead and drop Sony then. Then they can actually see what a ridiculous move that would be. It would then be hilarious to watch them crawl back to sony begging for forgiveness. This dude's a retard.
 
Apr 17, 2009
7,731
San Diego, CA
They should go ahead and drop Sony then. Then they can actually see what a ridiculous move that would be. It would then be hilarious to watch them crawl back to sony begging for forgiveness. This dude's a retard.
I agree. When I read it I was like "please do." Everyone knows sony will be supporting the PS3 for years to come. Everyone in the industry is so short sighted. When the "attach rate" for the xbox 360 drops to ZERO because they abandon another system we'll see who's laughing.
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Ford Xy Falcon History
 
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This is all a big game. Nothing will happen. Its Activisions way of trying to push Sony. In a way I think that the guy doesn't know Sony as much as he thinks. Sony wont change a thing that they are doing. But in the end no one loses. Activision just wanted to try and get a bit more then usual. It was a play with no losses. So why not try?