| leo-j said: According to Kotaku the PS3/PS2 combined account for 40% of all of Activision's gaming revenue in 2008, yet Activision let out a threat to sony not to long ago saying they would stop supporting the Playstation platforms all together in a year if something isn't done about hardware sales. Then this came along..
http://kotaku.com/5161882/so-which-console-is-buttering-activisions-bread
|
A few things people forget to account for.
First, PS3 was 8 percent of the revenue in 2008. It may be less in 2009, we don't know but I am sure they have a good idea where it will be. And his statement was forward looking, saying if things go down from here in 2010 or 2011 we may drop support. So he may be saying that if it drops to 4 percent we will drop support for it, we do not know the number he has in mind but there is one low enough that anyone would agree it is worth dropping. And do not forget that revenue is not equal to profit and that the share of profit generated could be significantly different then the revenue share.
The second thing is there is opportunity cost when developing for any system. Meaning if that it is not just a question of am I making money on the platform but could I be making more if I put the same money into another platform. For example say the cost of a typical game developed on 360 ported to PS3 is $3 million, obviously assuming a huge savings because it is a port. For every two PS3 titles released a high quality Wii game could be built or a budget 360 game or they could probably build 10 for mobile. If any of those games could have enough of a market to make more of a profit then the PS3 port then it is in the companies best interest to drop the PS3 and put the money into the other platforms.
Lastly there are cost savings in supporting fewer platforms because you can scale the fewer platforms to higher levels making them more resource efficient. To give a trivial example that can scale up imagine you had only one team per platform. Project resource demands are on a parabolic curve where you need only a few people in the beginning but scale up to a massive team by the end. With only a single team it is very hard to keep everyone busy all the time. As you add projects you can schedule them such that the peak in one overlaps with the valley in another and use your resources more efficiently. As you add more teams this efficiency increases. This same concept works for other departments such as marketing and even into HR as well as for capital expenses such as hardware and software licenses. Of course if all of your platforms already have enough projects that they are highly efficient then this is less important, but it is something to watch for as the number of titles for a platforms goes down.
I am not saying Activision really meant they would drop support for Sony soon or at all, I do not know enough about their business to be able to say. What I am trying to remind people of though is to not dismiss something so casually because there are conditions for everything where what seems unthinkable one day becomes a reality the next and you never now where that tipping point is.
