jcp234 said:
Right, I realized I probably did not do a good job of verbalizing what I intended. The post I responded to communicated something to the fact that if Activision was selling products at a loss for the PS3 platform, that Activision would just sell more products at a loss if the PS3 install base increased (or did I misinterpret that?) Products are usually priced to cover variable costs...and after a certain number of units sold, fixed costs are eventually covered as well. So it is possible that if Activision did hypothetically take a loss on certain PS3 projects...it could have made a profit if more units were shifted... I hope that made more sense? If not, I give up...lol |
I'm talking about after that point. If they really aren't making a profit on over 3M units on PS3 of a title then they've got a problem that a PS3 price cut seems unlikely to help - i.e. they should be beyond the fixed development costs, etc. and into cost of the unit, packaging, etc. and royalty payments at that point. Selling more means more units with the same package costs, royalties, etc.
I'm sure Activision made a loss of a few PS3/360 titles. It's a pretty accepted scenario that for every megahit you're going to have a few titles that don't even turn a profit.
Again, that's the point. He's skewing the facts to suit his argument. Titles that aren't selling well are down to poor reception for the most part, not install base. Install base does help the megahits but those are sure to be profitable anyway.
I'm not sure I explained myself too well either. Basically although very successful right now a lot of that is down to a few key titles that are for sure profitable on PS3 and for sure that Activision couldn't afford to lose the PS3 sales on - particularly as the PS3 install base is larger than when CoD4 launched.
Again, it just doesn't make sense the way he's spinning it.
Try to be reasonable... its easier than you think...
