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Forums - Sony Discussion - Activision threatens to "stop supporting" Sony consoles.

heruamon said:
Ail said:
heruamon said:
Ail said:
heruamon said:
gebx said:
markers said:
stop supporting a console you sold an estimated 13.55 million games on?

http://vgchartz.com/games/index.php?name=&keyword=&console=PS3®ion=All&developer=&publisher=14&genre=&boxart=Both&results=50&order=Hits

how bout making something great before you stop supporting a console that sells your crappy games.

 

That's 13.55 million copies over 29 games (467,000/game), and if you take out the top three games (CoD4, GH3, GHWT), the average drops to 235,000 copies/game

Q - So what if Activision just deciced to drop everything except for GH and CoD?

A - They probably make more Profit, because the developers would not be making these statements if they were HAPPY with the PS3.

 

 

 

Just to compare to the 360

38.04 million over 39 games (975,000 copies/game)

Take out the top 3 game and that's 23 million over 36 games (638,000 copies/games)


Plus a key point he made was that it was more difficult to develop for the PS3, as compared to the 360.  Eventhough others have said, it's not more difficult, it's been mostly from people who are exclusive to that console.  The bottomline is ROI...I'm sure they aren't losing money, but they can get better returns by working on other projects...that's the bottomline. 

That's not really the case for a company whose stated strategy is to to work on a very limited number of titles with the goal for each of those titles to be megablockbusters like Activision have been stating for the last 2 years...

Working on more project would just be counterproductive with that.

 

Fact is Activision CEO should stop talking out of his ass and realize that his statement may be aimed at Sony but it's bound to anger fans that are PS3 owners and angering your fans for no reason is never a good move....


So...you think his comments are just nonsense...I mean...the guy IS the CEO, not just some talking head.  He's the one who would makes the decision here...he must have some point he's trying to make...very publicly, and very explicitly.  He clearly stated that ROI is key here.

He's been getting very cocky since the merger with Blizzard and the success of CoD and GH.

Fact is both his huge franchises are getting old and Activision needs to get some new IPs sometime soon and stop focusing 99% of their effort on milking franchises that are several years old...

I purchase 20 or so game a year and at most 2 are from Activision and it's not because I despise them. It's just that they are starting to suck big time at renewing their catalog...

If I had been a journalist I would have asked him ' why don't you lower the price of your games if you want to sell more units ?'

Just to see the look on his face....

I mean come on, You have a publisher making heaps off money selling games on a console that looses money and the guy asks the console makers to loose more money to help him make more... That's not even win-win in the long run....

 


I'm with you...as I didn't even get the  latest COD, but  plan on getting MW2.  I DO give ALOT of money to Activision, since I support 2 accounts on WoW, one for me, and one for my nephews, but overall, I'm not a super fan of their catalogy.  We knoe SCII isn't going to consoles, but Diablo III could be possible...at least theoretically.  Wolverine was cool, but I was playing Fallout, and didn't get it, now I'm on Red Faction and Prototype, so chances are, I'm not going to get a chance at it. 

 

I give them a lot of cash through Wow and will get D3 and SC2 but that has little to do with their console strategy.

Activision gets most of their console revenue through CoD and GH and while CoD is still expanding, GH is getting old and they can't expect to sustain the revenue they are getting from that game for much longer ( people are not stupid and are getting tired of having to purchase new instruments every year...)



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

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JEDE3 said:
NJ5 said:

Wow, read this:

http://www.edge-online.com/news/activision-ceo-“we-might-have-to-stop-supporting-sony”

Kotick, who said recently that he was disappointed the platform holders opted not to announce console price cuts at E3, also noted that Activision had paid Sony $500 million in royalties and other goods last year, which “probably still worked out at 400 percent of the profit they made.”

 

According to Activision's 2008 FY report (pdf), PS3 publishing revenues were $241 million. There's probably some confusion here, but maybe Activision is not making that much profit from the PS3.

 


Wait, does that say they paid more for royalties than they made? Yeah right. maybe the reporter mis heard the dude. 5 million sounds a lot like 500 million right?

Dunno, but if 400% of the profit made = $500 mil, then the Activision profit was $125 mil for the year, which sounds par for the course for a good publisher year.



Akvod said:
TheThunder said:
Aiemond said:
TheThunder said:
Aiemond said:
TheThunder said:

if I were Sony I would call him on his bluff. He would be fired the next day if he did it. Seriously think about it.

Unless they think the money going to ps3 projects can make more profit if they are put on other ones, or they think they can get a deal to decrease the license fee they pay to Sony or if they think they can pressure a faster price cut. It could be all three as well. I don't know if they can make more money if they stopped ps3 support, but if their financials and models point to it being the case there is no reason for them to continue the support. Lastly, did you see CEOs being fired when they stopped GC support? If not why is this any different?

it simple really if you are going to drop a source of a profit (yes their games on PS3 bring profit big time) then you should find another source that replaces that gap you made or else shareholders are going to pissed. PS3 games may sell less than 360 but they still bring them great revenue and profit each year and they can't just say no to that it just won't happen. PSP on the other brings only like 1% of their revenue according to their financial report back in 2008

That's what I am saying. That they are going to replace the ps3 projects with ones that have better returns. They explain this to shareholders by using their models, graphs, figures etc that they used to come to this conclusion and then talk about how much more they will make with these investments. Also, coupled with the comments he makes, it seems they make less profit off a ps3 project than they would a similar 360 profit cause costs are higher.

From the times article: http://business.timesonline.co.uk/tol/business/industry_sectors/media/article6531367.ece?print=yes&randnum=1245400825888

The target is Sony, the once-dominant hardware maker. “I'm getting concerned about Sony; 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. Games generate a better return on invested capital on the Xbox than on the PlayStation,” he says

So, they say no to PS3 if they think they can take the money they are spending on it and put it to a more porfitable project.

 

This is prolly what happened to MW2 wii imo, even though it makes me sad to admit it.

you have a point but let's look at this from a smart business stand point. Now the PS3 brings less profit than the 360 sure but it is still PROFIT that's one. Second, what would you do keep pumping highly recognized titles that will sell and sell or element 22 million potential shoppers to focus on bringing less recognized titles to an even smaller base than you had before ?? I think you see where am I going with this.

they really would not cut the PS3 from the COD and GH it just won't happen. Less profit than another platform yes but it's still some biiiiiig chunk of profit and those new projects you have have got to sell almost as good as you current Big blockbusters just to return the profits you lost potentially on the platform you cut earlier

Bottom line a big FAT empty threat that's all.

To add on, the reason someone threatens is to get something out of the other person. Lets say Activision follows through. They lose profit, and while Sony will have a huge blow on them, they're not going to commit suicide by cutting the price, and so Activision will be losing profit for nothing.

Its not empty. I don't know what will replace it. Maybe some of it will go to more map packs, which have a good roi and sell well. Maybe they have a new franchise they think they can make big and then can milk for the long run. More dlc for other activision games, etc. There are alot of things they could do. Now, I am not saying that CoD and GH will go but prolly smaller projects. And if they did get rid of ps3 CoD, they would have an idea that they are very sure would make more profit than ps3 CoD (remember they make less profit on PS3 map packs due to Sony charging alot for DLs).

 

Threats are to get something, activision wants price cuts and royalty cuts. But its not empty. If they don't get them they will do what makes them the most money and dropping ps3 as a platform may well do this with all the evidence that has been lined out.

 

Akvod, did you read all the quoted material? It will not be for nothing, they would put the money other places to make that profit (and make more perhaps). PS3 costs more to dev for, ps3 has smaller userbase, thus profit margins on ps3 titles are smaller than other consoles. And since with small margins you need volume, this worked in the ps2 days. But small volume + small margin = No thx.



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In the end he's just flexing his muscles and trying to demonstrate that Activision is now able to play balls with the console makers and have some influence on them.

When the price cut happens he will probably thinks he had something to do with it and tell people it's a proof of the influence Activision has over console makers.
Just a power game...



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

Aiemond said:
TheThunder said:

it simple really if you are going to drop a source of a profit (yes their games on PS3 bring profit big time) then you should find another source that replaces that gap you made or else shareholders are going to pissed. PS3 games may sell less than 360 but they still bring them great revenue and profit each year and they can't just say no to that it just won't happen. PSP on the other brings only like 1% of their revenue according to their financial report back in 2008

That's what I am saying. That they are going to replace the ps3 projects with ones that have better returns. They explain this to shareholders by using their models, graphs, figures etc that they used to come to this conclusion and then talk about how much more they will make with these investments. Also, coupled with the comments he makes, it seems they make less profit off a ps3 project than they would a similar 360 profit cause costs are higher.

From the times article: http://business.timesonline.co.uk/tol/business/industry_sectors/media/article6531367.ece?print=yes&randnum=1245400825888

The target is Sony, the once-dominant hardware maker. “I'm getting concerned about Sony; 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. Games generate a better return on invested capital on the Xbox than on the PlayStation,” he says

So, they say no to PS3 if they think they can take the money they are spending on it and put it to a more porfitable project.

 

This is prolly what happened to MW2 wii imo, even though it makes me sad to admit it.

What are Activision's current "PS3 projects"? Certainly they are not exclusives, thus it's only multiplatform games we're talking about.

Can you think of another investment that has higher ROI than putting money into developing a PC/360 game for the PS3 as well? I've tried, but...

  • It's not another PC/360 game, because extending the first game for the PS3 would cost less than that relatively to the expected sales.
  • It can't be an exclusive (either PC/360/Wii) because they generally have lower ROI.
  • Could it be making it a PC/360/Wii game? I doubt the costs of adapting a 360/PC game to the Wii would be lower, because it would require a lot more trimming and shoehorning, plus lower revenue per copy because of the final price. Wii sales numbers I don't think could exceed those of the PS3 - at least for the kind of games you also develop on 360 and PC.

Any ideas?



"All you need in life is ignorance and confidence; then success is sure." - Mark Twain

"..." - Gordon Freeman

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i think bobby's threats also very likely not going to happen, but not entirely impossible either.. @thethunder, 60% of atvi's operating profit comes from blizzard, so the entire console business is less of a focus for them (esp as they prepare for release of new starcraft, diablo, etc); also i think likely scenario is if they were in fact to cut GH and CoD from PS3 (which again i don't think they would do but just for arguments sake) it will actually drive a lot of incremental sales of the 360, which means PS3 loses even more mkt share, becomes even less attractive to other 3rd party developers, and adds even more pressure for them to cut price. downside to atvi is more incremental, clearly they are leveraging their strong game slate but obviously not going to bear the brunt of costs for the benefit of other 3rd party developers



This is exactly what Activision has done with Call of Duty on the Wii. They won't release MW2 for it, even though W@W sold over a million.

PS3 fans said "1 million isn't that much just look at PS3 or 360 version".

Well, Guitar Hero and most other Activision games sell like shit on the PS3 compared to 360 and Wii. Same thing.

I disagree with Activision on both accounts, but the Sony fanboys shouldn't be hypocrites here.



jahheim said:
i think bobby's threats also very likely not going to happen, but not entirely impossible either.. @thethunder, 60% of atvi's operating profit comes from blizzard, so the entire console business is less of a focus for them (esp as they prepare for release of new starcraft, diablo, etc); also i think likely scenario is if they were in fact to cut GH and CoD from PS3 (which again i don't think they would do but just for arguments sake) it will actually drive a lot of incremental sales of the 360, which means PS3 loses even more mkt share, becomes even less attractive to other 3rd party developers, and adds even more pressure for them to cut price. downside to atvi is more incremental, clearly they are leveraging their strong game slate but obviously not going to bear the brunt of costs for the benefit of other 3rd party developers

 

Issue with 60% of the profit coming from Blizzard is that Bobby has actually very little claim on those as it's a known fact that Blizzard is mostly independant within the ATVI entity and that they were already generating that kind of money before the merger.

So Bobby has to grow the console business significantly if he wants to leave his mark on the company..

Because he can talk all day long about how ATVI kicks ass , fact is aside from CoD and Gh it is mostly due to something he had no impact on......

Heck if he wanted higher ROI he could close the Activision shop and just keep Blizzard running the show..



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

i'm neutral on bobby, but to say that he hasn't left his mark on activision or the video game industry would be a stretch.. he bought atvi when it was doing under $100mm sales and turned it into the largest 3rd party developer.. and you can say "aside from CoD and GH" but why would you discount 2 of the most successful franchises ever? The fact that the other titles haven't performed as well on a relative basis shouldn't take away from that success.
i also think it's wrong to judge him necessarily on development of the games, clearly he is not sitting in front of a computer programming and drawing art, but he's clearly done a pretty good job of rounding up talented developers and the merger with vivendi i would say is nothing short of a financial success.
i agree that blizzard operates pretty independently within atvi but mike morhaime and bobby are always on the road together so its not like its 2 separate companies
in terms of what bobby has claims on.. its a lot more than i could ever hope to have but i guess that depends on your viewpoitn
and nobody operates their business purely on an roi basis.. thats like saying you'd rather do $1 of sales if you can get 90% margin instead of $100 of sales with 40% margin.. you can operate your biz for RIO's but i'll take the $40 over the $0.90 any day..



jahheim said:
i'm neutral on bobby, but to say that he hasn't left his mark on activision or the video game industry would be a stretch.. he bought atvi when it was doing under $100mm sales and turned it into the largest 3rd party developer.. and you can say "aside from CoD and GH" but why would you discount 2 of the most successful franchises ever? The fact that the other titles haven't performed as well on a relative basis shouldn't take away from that success.
i also think it's wrong to judge him necessarily on development of the games, clearly he is not sitting in front of a computer programming and drawing art, but he's clearly done a pretty good job of rounding up talented developers and the merger with vivendi i would say is nothing short of a financial success.
i agree that blizzard operates pretty independently within atvi but mike morhaime and bobby are always on the road together so its not like its 2 separate companies
in terms of what bobby has claims on.. its a lot more than i could ever hope to have but i guess that depends on your viewpoitn
and nobody operates their business purely on an roi basis.. thats like saying you'd rather do $1 of sales if you can get 90% margin instead of $100 of sales with 40% margin.. you can operate your biz for RIO's but i'll take the $40 over the $0.90 any day..

I know the ROI thingy, that is why the threat of pulling away from PS3 based on ROI seem so stupid....

 

 

 



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !