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Activision CEO Hoping For $200 PS3, 360 By '09
Gamespot reports on comments made by Activision CEO Bobby Kotick at this week's Reuters Media Summit in NYC; the publishing veteran feels strongly that deep price cuts are needed in the next two years to ensure that this generation of consoles reaches a truly mass market audience. For comparison: "The original Xbox dropped to the sub-$200 range six months after debuting at $299 in November 2001. The PlayStation 2, which also retailed for $299 when it launched in 2000, fell below $200 in May 2002, and subsequently has sold more than 120 million units as of its seventh anniversary in October. Nintendo's ill-fated last-generation console, the GameCube, was originally listed at $199 when it first went on sale in November 2001, though that price was cut to $150 by May 2002."
You'd think that with what the CEO of Activision makes he could afford more than $200 for a PS3.
People need to stop using hardware sales as the sole metric for determining success. Nintendo's business plan is fundamentally different than that of MS and Sony because they're actually turning a profit on each console sold. The other two rely on game sales for profits, which seems to be working at the moment for the 360, perhaps slowly followed by the PS3.
Take a look at recent sales numbers: http://www.vgchartz.com/aweekly.php
Scroll down to where software sales by system are compared, then subtract out the number of Wii Sports and Wii Play sales from the Wii total to find out the non-bundled sales number. You would end up with software sales as follows (of this generation):
1. 2,369,203 - Xbox360
2. 1,944,527 - Wii
3: 943,709 - PS3
Nintendo's really moving their systems, but with the exception of Super Mario Galaxy and the two bundled games, has a relative dearth of top 10 titles for the Wii. Xbox360 in terms of hardware sales, while trailing the Wii, and depending on the week selling on par with the PS3, is doing quite strongly in software sales. More expensive system, more expensive games, and still sells a lot.
So if you're MS, why cut prices just because the Wii is cheaper? They're going to keep on chugging along until their costs come down enough that the increase in game sales from a price cut outweighs the foregone income on hardware sales.
Nintendo isn't dominating the market but expanding the market, which is exactly what they set out to do. In succeeding at this goal they've shown that there is room for more than one console and discussion of a 'winner' is generally unproductive.
So the CEO of a game company that sells . . . oh let's start with Rock Band, for about $170 to run on a game console that he wants to cost $200. I'm not sure if this is a sign of good things (e.g., hardware costs coming down so you're only spending money on content), or content prices going up to compete with hardware costs. I mean, remember the day when your computer costs $2k and games were $30 to $40? Is that easier or harder to stomach when hardware costs are equivalent to only 3 or 4 games? I, for one, was a little outraged to find that Guitar Hero III for the Wii was $90. For what? Well, music licensing I guess, but still, $90 for a game.