Cueil said:
Reasonable said:
Cueil said:
Reasonable said:
Nice response.
I think you're still misunderstanding what I mean by lost sales in 1) though.
I'm talking lost sales as in where there is a consumer purchase to be had but you leave it on the shelf.
Let's take Prototype as an example and imagine it had just released on 360/PC only.
Going by this site, and assuming that the title doesn't warrant a console purchase to play it (which I think seems fair for Prototype), then Activision would have saved some development costs but would have 'lost' the 175K in units sales on PS3, and would therefore have lost the revenue and profits generated by those 175K.
Put simply, I don't believe any cost savings would justify that lost revenue. Prototype would be 'down' 175K in sales.
This impacts Activision's size as essentially while they may cut some costs and show a better profit margin their sales revenue would dip due to all the sales 'lost' by not providing a PS3 version.
And therein lies a catch 22. If Activision want to support 360 and drop PS3 they need to commit not to cutting costs/support not just on smaller titles like Prototype, but drop the big titles, like MW2. Or they just cut support for the smaller titles but that risks having little effect and might tip scales in other developer's favour. After all Activision is a publisher, if you were a developer would you want to go with Activision or another publisher willing to support your title across a larger install base?
No-one is going to panic if they discover Activision is going to stop releasing decent to rubbish titles on the PS3 while continuing to support the platform for the 'biggies'. But to do that would likely hit hard initially. Consider the potential lost sales if MW2 didn't release on PS3. Sure, they'd get some back from people swapping platform (although that's a maybe) but they'd very likely still lose 2 to 3M in unit sales of the title.
But I actually think, as I stated and you seemed to agree, that in many ways all the posturing around attach rates, support, etc. is a simply that, posturing. They want better royalties, that's my reading. And they're never going to have a better time to push for them IMO - although I think they may be misjudging Sony as a company inasmuch as I believe Japanese etiquette would prefer such wrangling to occur more 'behind the scenes' than this.
|
Titles like Prototype would have been better served being exclusive... every new IP should have at least some timed exclusive deal to increase it's chances of success. However games like Call of Duty are so huge and have separate teams working on two different platforms at the same time and it's highly likely that the PS3 team is a deal larger than the 360 team if they want to stay on par with them. Also from what I understand Cell specialist are rare and very costly to employ. It would be really neat if he laid out the numbers to us even if it's just the CoD series. If Modern Warfare 2 does Halo 3 like numbers on the 360 then the likely big-for-PS3 numbers are going to look rather pathetic. In the end it's all about Profit Margin... If they feel that cutting development of their Core titles from Sony's platform would increase profit they'll do it in a heart beat and I think Modern Warfare 2 is the first big test for Sony. I think there is more than just a bluff here and while he's not totally serious he's probably not the only one thinking this.
|
I'm sorry, but this 'its all about profit margins' is wrong.
Do you think Activision would rather be option a) or b) below:
a) a company with a turnover of $100 Million and profit margin of 65%
b) a company with a turnover of $5 Billion and profit margin of 35%
I'm very sure the answer is b). I work for a company with turnover of over $30 Billion. We take our profit margin seriously, we also take being a market leader and turnover (volume) equally seriously. Margin is super important, but if you want to be one of the big boys then revenue and size is equally important.
This isn't just about profit its about size - which is turnover and units sold for Activision.
Otherwise you make good points RE: exclusives, etc. but I think they are slightly OT in the sense this is about is it profitable and for Activision to skimp on PS3 support or not and how would it affect revenue performance.
Clearly the guy isn't going to say this for nothing, he has ulterior motives and is probably unhappy with how a lot of earlier Activision titles sold on PS3 vs the cost of ramping up on the platform.
But they are ramped up, all recent titles have been near enough 3:2 in split, and it seems to me his problem is getting PS3 bundles with Activition titles, particularly in US, and getting a better royalty rate.
|
That's why I want to see numbers... I'd liike to see how much profit they are getting with each console. I'd like to know the size of the Modern Warfare 2's two teams that are working on the 360 and PS3 version laterally. I mean how much of a diffrence is there(2:1, 3:2?)? Does the 360's unified ram make the 360 team demand bigger textures... does the PS3 team want to make a more complex skeleton for their models. What is the cost associated with optimizing it for the Cell Processor? Also do they have to pay royalties to Sony for the Game and BR? I mean 500 million dollars is alot of money in royalties.
|
Numbers would very much help.
For example, if a game sells 4M copies, at say $40 average (just as an example, as of course globally exchange rates, etc. complicate everything) then you've got $ 160 Million - a nice figure. But of course without knowing royalty terms and development costs the profit margin isn't clear.
In the end I believe he's speaking from a position where he feels the situation could be better, but I struggle to believe Activision isn't making money on supporting PS3 - I just think they want more money and better margins.
The funny thing is, personally, CoD and GH aside I've found many titles lacking from Activision. I think they were damn lucky to see some of the sales they did due to bunlding and the uncanny appeal of average games based on hot film properties. Certainly Kung Fu Panda and the Marvel title that got bundled with 360 didn't deserve the sales recorded as a result (at least IMO).
Therefore while I think he's fully entitled to seek better royalties if they are unfairly steep in the current climate, I'd like to see Activision deliver better games more consistently. That's what almost always drives better sales. Prototype has reviewed pretty well, had reasonable hype and sold about same on 360/PS3 (ratio to install base) and I think that, coupled with the big hitters, is what Activision has to aspire to.
Just dropping support for PS3 for weaker titles doesn't make sense as going forward, with plenty of big titles to bundle and a far better library than previously, I would imagine Activision's chance of seeing a lot of fairly average titles do well on 360 will decrease. They need to up the quality of their games IMHO or their time of power as the biggest publisher may be fairly brief.
And that's the crux of it. I can imagine them thinking, okay, no PS3 Kung Fu Panda, but so what? But they won't ever drop support for CoD, MW and GH so long as they sell the way they do.
Using my example above of 4M copies at $40 dollars, it's pretty clear that for Cod/MW Activision could afford to develop the thing for PS3 at same cost as 360 (i.e. double budget) and still make a profit.
