Activision CEO Warns Sony That the PS3 Needs a Price Cut

Bobby Kotick, President and CEO of Activision, one of the largest game companies in the world, has come out with a none-too-subtle warning to Sony that they need to seriously consider a price drop on the Playstation 3. Rumors have been circulating for months that such a drop was forthcoming, but Sony has staunchly denied that they had any plans to drop prices, Kotick said, "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. ... 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." While it's unlikely that Activision would follow through with such a threat, it definitely adds to the pressure Sony is feeling to lower the PS3's price. Sony issued a brief response which said nothing of consequence.

Comments

When planning on lowering prices, best to shut up

[BadAnalogyGuy]

Sony execs aren't dumb. They aren't going to announce price cuts until they happen.

http://en.wikipedia.org/wiki/Osborne_effect

Activision BLIZZARD can afford to be dicks.

[Sarusa]

Why does everyone just say 'Activision'? Uneasy about dragging your beloved WoW into this? It's Activision Blizzard, and that 'Blizzard' along with Call of Duty and Guitar Hero are why Kotick can afford to be the huge raging prick he is.

He's got a long history of being a total @#$hole to squeeze profits, and it's worked. He's the reason you're going to be paying for Starcraft II three times instead of one, no matter what lame excuses they feed you. He's got no compunctions about selling you multi-hundred dollar overpriced plastic controller sets to go with his games while he complains about PS3 prices. His unbridled douchebaggery works quite well, at least in the short run, and it might work in the long run because Blizzard can get away with anything.

Now of course he knows that Activision Blizzard paid Sony $500 million dollars last year in per-game royalties and other crap, and I'm sure he's looking to shave some of that. That's what this is really about. And Sony is vulnerable - just the suggestion that a major publisher could drop the PS3, even if they wouldn't, is hugely damaging when they're in third place in the largest markets. I'm sure fanbois will sneer that they don't need Activision, but someone's sure buying their stuff on PS3.

I'm not giving them any money because of the Brutal Legend fiasco (part of Kotick's deliberate cockmongering), but I realize that's sort of quixotic. In general you people (forgive my broad brush) will continue to bend over and spread wide for Call of Duty and WoW and Starcraft and Diablo III.

Developing for Cell Processors . . .

[PolygamousRanchKid]

. . . is probably a royal pain in the ass. Any /. Cell developers care to comment?

Kotick said, "It's expensive to develop for the console." Read that as time, people and money, when compared to other platforms.

I would think that Sony would be bending over backwards to support developers.

OS/2 was a better OS than Windows, but there were not enough applications for it, so folks flocked to Windows.

I'm curious to hear how the Cell development environment is: "Great, Challenging, or Run Away!"

Re:Developing for Cell Processors . . .

[hattig]

The majority of the cost of writing a game is in media creation, not programming. Media = textures, videos, 3D objects and animations, maps, structures, music, sound effects, etc.

The media can be reused across different platforms - typically 360, PS3 and PC. A Wii version might use scaled down versions of the same media.

On top of that, you usually develop a game on top of a game engine, so if you re-use that engine across titles, the per-platform development cost goes down even further.

The PS3 has plenty of games, many of then unique to its platform. Its sales rate is the same as the 360 across the world, and if you exclude the USA it's outselling the 360. The 360 does have a year's headstart on its side, hence its 7m extra sales. Most game developers have got the hang of the PS3's hardware to the point where the games are now no worse than the 360, with promises of more improvements to come.

If anything, this entire article says more about the standard of programmers at Activision.

However I do think a price drop on the PS3 hardware would benefit everyone. I do suspect that they're creating a slim-line version using 45nm components. This is when the sales will take off (as with the PS2 slim), especially if GT5 launches at the same time. Right now Sony must be making a profit on the hardware, given how much the price of BluRay drives has dropped.

Re:When planning on lowering prices, best to shut

[BadAnalogyGuy]

Yes. As I said, Sony execs aren't dumb. They leak info that helps them.

Osbourne effect:
company: Next generation models are going to be faster, cheaper, and better!
consumers: We should definitely wait for the next one.

Reverse Osbourne effect:
company: Next generation models are going to slower and less featureful!
consumers: Oh shit! We better get while the getting's good.

Re:Politics wouldn't have anything to do with it,?

[Anonymous Coward]

Bzzt. Try again.

Nobody outside /. cares about the fact that Sony is part of the MPAA and RIAA.

Sales are down because just about everyone that's willing to buy one at $399 has already done so. Sony is just playing chicken with the fence-sitters, because they know they can get more money if they wait it out.

Personally I plan to buy one the minute it goes under $350, and I don't care how long it takes. Longer just means more good+cheap games in the greatest hits collection.