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

jahheim on 23 June 2009

Looking at total cost of making a game, 50% is development, 50% is marketing. So porting to a new console/platform is somewhere



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Cueil on 24 June 2009
Reasonable said:
Zizzla_Rachet said:
Reasonable said:
Zizzla_Rachet said:
Reasonable said:
Legend11 said:
Reasonable said:
FKNetwork said:
BladeOfGod said:
FKNetwork said:

Activision will be the first of many, PS3 is a TOTAL disaster, always has been always will be, good on Acitivision I say, about time publishers had the balls to say what they really think, now they have came out and said this others will follow as they won't be worried about causing upset to Sony,

No price drop, hard and expensive to make games for, selling poorly, lowest install base, being outsold weekly by wii360, ps3 japan and u.s weekly sales numbers now at the lowest point since 2007, most multiplatform games STILL run/look better on 360 (ghostbusters anyone), high royalties for publishers, charging publishers for PSN bandwidth, list goes on,

Expect Activision to be the first of many, this will be the ultimate downfall and final blow for Sony, bye bye PS3.........

ROFL, keep dreaming

Keep dreaming about what? nothing I said is incorrect and you know it,

Funny isn't it how all of a sudden ps3 owners don't like activision games anyway so don't care if they stop making games for the platform, PS3 fanboy damage control in full swing lmao....

 

Even allowing for higher royalties, going by the numbers showing over 38% of Prototype sales launch week where from PS3 I doubt Activision is in any way, shape or form in a position it can abandon PS3 as a platform.  Lose approx 35% to 40% of most titles sales and associated profits?  Seems unlikely.


Would that really be the case though?  Every time there's a good 360 console exclusive that is also on PC or might be going to PC I notice a lot of PS3 gamers come in and say they'll play it on PC.  Then there are the people that own both consoles and those that would be pushed to buy another console if they felt there were enough good games to justify buying another one.

CoD4, etc. was on PC and that didn't hurt the PS3 sales.  Other titles are console only of course.  IMHO PS3 fans only say that when a title is 360/PC exclusive or if they genuinely play on PC for those titles anyway.  I doubt many PS3 fans really buy on PC vs PS3 unless it was a FPS or RTS and they prefer those on PC.

While they might save some sales via PC I doubt all the PS3 owners who bought CoD4, WaW, Prototype, etc are going to turn to PC.  They stand to lose a lot of sales and they know it.  And while they could shift focus to 360/Wii on the evidence they still stand to lose a lot.  If they did stop with PS3 releases Wii and 360 owners aren't just going to buy more titles because of that.  And I doubt many PS3 players would turn to a Wii version of CoD, or invest in a 360 if they're diehard.  Whichever way I look at it they seem sure to lose a lot of sales IMO.

Look, if they were really losing that much on PS3 they would jsut go ahead and pull support.  They're not.  I believe they don't want to.  I believe they want more 360s and PS3s out there.  Losing a platform is losing the install base.  There is no signal at all that Activision would prefer anything other than more PS3s and 360s sold not less.  I do believe they'd like better royalty terms and are willing to play rought/dirty, etc. to get 'em.

The PS3 install base is already too large to abandon IMHO.  The sales split is too large for most titles, and for some titles its probably closer to a 50% split - note that while FPS, etc. skew to 360 thanks to US a number of other genres result in more or less 50% split across PS3 and 360 thanks to selling more in Others and Japan.  So in some cases they could be looking to lose nearly 50% of the potential sales.

Neither the 360 nor the PS3 is dominant.  The 360 has a nice lead, but apart from a spurt since the price cut most of that is simply time adjusted, and any big developer like Activision knows that (plus I'll be amazed if FFXIII and GT5 in Japan and Others don't close the gap a fair bit).  Activision must know the PS3 hasn't even peaked yet - heck the 360 probably hasn't yet.

They're simply looking to take advantage of the current situation to try and force some concessions from Sony.  They might get 'em (not the price cut but something around royalties) or they might not.  Whether they do or not they're not going to pull the plug on the PS3 (and I doubt they'll pull the plug on the PSP or PS2 either).

 

They would also lose a 100% of the cost...So how exactly would they lose 50% of sales....If for the most part the games sell more on the Xbox 360...Exclusive development for the 360 would cut their cost dramaticly..It's the point he is making when we speaks of the revnue return

PS3 is over 10 mil in UK..I think the GT and FF base are already there....But I can not know for sure...

 

I may be misreading you post - but to lose 100% of the cost then the cost of the PS3 version would have to exactly match the 360 - i.e. if the title cost $10M then it cost another $10M on PS3.  This is extremely unlikely.  Ages ago Ubisoft, for example, were citing releasing on 360/PS3 as having an approx 10% overhead on development - i.e. if the game cost $10M then you could take the view it would cost another $100K to get a PS3 version. They would save the money of the PS3 developtment ..That's what I meant...And yes the company does count sales across all platforms it releases..But if no money goes into a PS3 version of a game...then there is no money or sales lost....If they where to not release a COD game on PS3 they upset the fans..But would not lose any invested capital From what he said it seems the PS3 does not meet their return expectations

I was talking about sales revenue.

A large company has to be profitable, it also has to be large - i.e. they would lose sales units and sales revenue if they didn't support PS3. I understand...But in a scenario where no investment capitol used and no localizing is done for a PS3 version it would not make them less profitable....Since the profits is something the CEO is saying is a problem on the PS3...I also understand that they would lose possible sales to a proven consumer base on the PS3...But as I said before with no investment come no exepectations...It would actually increase their profit per invested capitol if they only released certain games on the Xbox 360...since overall lower dev cost and distributing cost would see them getting an increase in profit margin

Don't be fooled by looking at very old releases, look at something like Wolverine or Prototype.  The PS3 sales units aren't far behind 360.  Without PS3 version those titles weren't going to suddenly sell more anywhere else (360, PC, etc).  So Activision lose those sales and associated revenue and profits. In the case of games like Xmen i see what you mean.....It would of been nice to have seen InFamorus vs Prototype in a exclusive sales battle...For converstaion sake...Maybe Prototype brings in the change they are looking for.

What some are arguing is this makes sense, as they could be more profitable - which is true.  However they then would likely lose their position as the largest publisher right now as that also depends on size - sales volume. I personally feel it's an empty threat and as you said before they might be trying to work an angle on Sony..I don't how they would lose their Position due to the xbox 360 being over 30 mil...and just look at EA. With their whole "360 Maxed out" thing....To me it came of as a part of a "Get moar PS3 owners to buy our games" stratergy...Yet Madden 10 is only advertized for the Xbox 360...Weird

Therefore I doubt they'd drop PS3 unless they were making a loss on recent games, which I doubt because:

a) I doubt having Wolverine, Prototype and recent games on PS3 cost double development of just having them on 360 - I find it hard to believe it added more than 20% max to the development cost I have no Idea if it did or did not....but his statements were post the releases of these game...

b) I doubt Sony royalties are that high they can't make a profit off the PS3 sales of Wolverine, Prototype, etc.  If they were then Sony would have to adjust them as it needs profitable developers working on the platform (BTW I think the royalties is the real issue for Activition here so do I ) Do they have to pay royalties to Sony for using teh Blu-ray format?

c) I don't believe they want to lose the volume of sales they've seeing on PS3 for most decent titles at the moment This kinda brings us back to square one

d) I don't believe they want to limit themselves to US (even though arguably most of their titles do best there) as I believe they want to remain biggest if they can and they'd be hadning EA, etc. an easy weakness to exploit if they stopped supporting a platform that can sell more units of games in Others and Japan In the case of "Others" They would do the Xbox 360 a favor and force fans of their games not buying for 360 to consider getting one...It seems that with the size of Activision and EA that they felt they needed to add their two cents in the console war

e) I don't believe it! I can't believe it's not butter

 

Basically, I don't believe they're trying to do anything other than get their royalty payments adjusted and try and actually grow PS3 install base.  Frankly, I'm amazed that, looking just at sales split of Wolverine and Prototype, and with the iminent hugeness of MW2, anyone thinks they would seriously drop support.  The only valid justification would be the PS3 platform dying, and again I just believe we're past the point of that happening.  There are too many titles coming that are big exclusives over next 12 months, and very probably a price drop, for PS3 to suddenly collapse in the 2010, etc. timeframes Activision cite. It does seem a bit outlandish and if you read between the lines the royalties things is most problable...

 

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.



 
Get your Portable ID!

Tyrannical on 24 June 2009

Activision said they paid Sony $500M in royalties, and have made little to no profit on PS3 games. That’s why they are pissed.

I’m sure Activision will still release big name games on the PS3, but they might skip the lesser named titles.



Yet, today, America's leaders are reenacting every folly that brought these great powers [Russia, Germany, and Japan] to ruin -- from arrogance and hubris, to assertions of global hegemony, to imperial overstretch, to trumpeting new 'crusades,' to handing out war guarantees to regions and countries where Americans have never fought before. We are piling up the kind of commitments that produced the greatest disasters of the twentieth century.
 — Pat Buchanan – A Republic, Not an Empire

Reasonable on 24 June 2009
Cueil said:
Reasonable said:
Zizzla_Rachet said:
Reasonable said:
Zizzla_Rachet said:
Reasonable said:
Legend11 said:
Reasonable said:
FKNetwork said:
BladeOfGod said:
FKNetwork said:

Activision will be the first of many, PS3 is a TOTAL disaster, always has been always will be, good on Acitivision I say, about time publishers had the balls to say what they really think, now they have came out and said this others will follow as they won't be worried about causing upset to Sony,

No price drop, hard and expensive to make games for, selling poorly, lowest install base, being outsold weekly by wii360, ps3 japan and u.s weekly sales numbers now at the lowest point since 2007, most multiplatform games STILL run/look better on 360 (ghostbusters anyone), high royalties for publishers, charging publishers for PSN bandwidth, list goes on,

Expect Activision to be the first of many, this will be the ultimate downfall and final blow for Sony, bye bye PS3.........

ROFL, keep dreaming

Keep dreaming about what? nothing I said is incorrect and you know it,

Funny isn't it how all of a sudden ps3 owners don't like activision games anyway so don't care if they stop making games for the platform, PS3 fanboy damage control in full swing lmao....

 

Even allowing for higher royalties, going by the numbers showing over 38% of Prototype sales launch week where from PS3 I doubt Activision is in any way, shape or form in a position it can abandon PS3 as a platform.  Lose approx 35% to 40% of most titles sales and associated profits?  Seems unlikely.


Would that really be the case though?  Every time there's a good 360 console exclusive that is also on PC or might be going to PC I notice a lot of PS3 gamers come in and say they'll play it on PC.  Then there are the people that own both consoles and those that would be pushed to buy another console if they felt there were enough good games to justify buying another one.

CoD4, etc. was on PC and that didn't hurt the PS3 sales.  Other titles are console only of course.  IMHO PS3 fans only say that when a title is 360/PC exclusive or if they genuinely play on PC for those titles anyway.  I doubt many PS3 fans really buy on PC vs PS3 unless it was a FPS or RTS and they prefer those on PC.

While they might save some sales via PC I doubt all the PS3 owners who bought CoD4, WaW, Prototype, etc are going to turn to PC.  They stand to lose a lot of sales and they know it.  And while they could shift focus to 360/Wii on the evidence they still stand to lose a lot.  If they did stop with PS3 releases Wii and 360 owners aren't just going to buy more titles because of that.  And I doubt many PS3 players would turn to a Wii version of CoD, or invest in a 360 if they're diehard.  Whichever way I look at it they seem sure to lose a lot of sales IMO.

Look, if they were really losing that much on PS3 they would jsut go ahead and pull support.  They're not.  I believe they don't want to.  I believe they want more 360s and PS3s out there.  Losing a platform is losing the install base.  There is no signal at all that Activision would prefer anything other than more PS3s and 360s sold not less.  I do believe they'd like better royalty terms and are willing to play rought/dirty, etc. to get 'em.

The PS3 install base is already too large to abandon IMHO.  The sales split is too large for most titles, and for some titles its probably closer to a 50% split - note that while FPS, etc. skew to 360 thanks to US a number of other genres result in more or less 50% split across PS3 and 360 thanks to selling more in Others and Japan.  So in some cases they could be looking to lose nearly 50% of the potential sales.

Neither the 360 nor the PS3 is dominant.  The 360 has a nice lead, but apart from a spurt since the price cut most of that is simply time adjusted, and any big developer like Activision knows that (plus I'll be amazed if FFXIII and GT5 in Japan and Others don't close the gap a fair bit).  Activision must know the PS3 hasn't even peaked yet - heck the 360 probably hasn't yet.

They're simply looking to take advantage of the current situation to try and force some concessions from Sony.  They might get 'em (not the price cut but something around royalties) or they might not.  Whether they do or not they're not going to pull the plug on the PS3 (and I doubt they'll pull the plug on the PSP or PS2 either).

 

They would also lose a 100% of the cost...So how exactly would they lose 50% of sales....If for the most part the games sell more on the Xbox 360...Exclusive development for the 360 would cut their cost dramaticly..It's the point he is making when we speaks of the revnue return

PS3 is over 10 mil in UK..I think the GT and FF base are already there....But I can not know for sure...

 

I may be misreading you post - but to lose 100% of the cost then the cost of the PS3 version would have to exactly match the 360 - i.e. if the title cost $10M then it cost another $10M on PS3.  This is extremely unlikely.  Ages ago Ubisoft, for example, were citing releasing on 360/PS3 as having an approx 10% overhead on development - i.e. if the game cost $10M then you could take the view it would cost another $100K to get a PS3 version. They would save the money of the PS3 developtment ..That's what I meant...And yes the company does count sales across all platforms it releases..But if no money goes into a PS3 version of a game...then there is no money or sales lost....If they where to not release a COD game on PS3 they upset the fans..But would not lose any invested capital From what he said it seems the PS3 does not meet their return expectations

I was talking about sales revenue.

A large company has to be profitable, it also has to be large - i.e. they would lose sales units and sales revenue if they didn't support PS3. I understand...But in a scenario where no investment capitol used and no localizing is done for a PS3 version it would not make them less profitable....Since the profits is something the CEO is saying is a problem on the PS3...I also understand that they would lose possible sales to a proven consumer base on the PS3...But as I said before with no investment come no exepectations...It would actually increase their profit per invested capitol if they only released certain games on the Xbox 360...since overall lower dev cost and distributing cost would see them getting an increase in profit margin

Don't be fooled by looking at very old releases, look at something like Wolverine or Prototype.  The PS3 sales units aren't far behind 360.  Without PS3 version those titles weren't going to suddenly sell more anywhere else (360, PC, etc).  So Activision lose those sales and associated revenue and profits. In the case of games like Xmen i see what you mean.....It would of been nice to have seen InFamorus vs Prototype in a exclusive sales battle...For converstaion sake...Maybe Prototype brings in the change they are looking for.

What some are arguing is this makes sense, as they could be more profitable - which is true.  However they then would likely lose their position as the largest publisher right now as that also depends on size - sales volume. I personally feel it's an empty threat and as you said before they might be trying to work an angle on Sony..I don't how they would lose their Position due to the xbox 360 being over 30 mil...and just look at EA. With their whole "360 Maxed out" thing....To me it came of as a part of a "Get moar PS3 owners to buy our games" stratergy...Yet Madden 10 is only advertized for the Xbox 360...Weird

Therefore I doubt they'd drop PS3 unless they were making a loss on recent games, which I doubt because:

a) I doubt having Wolverine, Prototype and recent games on PS3 cost double development of just having them on 360 - I find it hard to believe it added more than 20% max to the development cost I have no Idea if it did or did not....but his statements were post the releases of these game...

b) I doubt Sony royalties are that high they can't make a profit off the PS3 sales of Wolverine, Prototype, etc.  If they were then Sony would have to adjust them as it needs profitable developers working on the platform (BTW I think the royalties is the real issue for Activition here so do I ) Do they have to pay royalties to Sony for using teh Blu-ray format?

c) I don't believe they want to lose the volume of sales they've seeing on PS3 for most decent titles at the moment This kinda brings us back to square one

d) I don't believe they want to limit themselves to US (even though arguably most of their titles do best there) as I believe they want to remain biggest if they can and they'd be hadning EA, etc. an easy weakness to exploit if they stopped supporting a platform that can sell more units of games in Others and Japan In the case of "Others" They would do the Xbox 360 a favor and force fans of their games not buying for 360 to consider getting one...It seems that with the size of Activision and EA that they felt they needed to add their two cents in the console war

e) I don't believe it! I can't believe it's not butter

 

Basically, I don't believe they're trying to do anything other than get their royalty payments adjusted and try and actually grow PS3 install base.  Frankly, I'm amazed that, looking just at sales split of Wolverine and Prototype, and with the iminent hugeness of MW2, anyone thinks they would seriously drop support.  The only valid justification would be the PS3 platform dying, and again I just believe we're past the point of that happening.  There are too many titles coming that are big exclusives over next 12 months, and very probably a price drop, for PS3 to suddenly collapse in the 2010, etc. timeframes Activision cite. It does seem a bit outlandish and if you read between the lines the royalties things is most problable...

 

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.

 

 



Try to be reasonable... its easier than you think...

Cueil on 24 June 2009
Reasonable said:
Cueil said:
Reasonable said:
Zizzla_Rachet said:
Reasonable said:
Zizzla_Rachet said:
Reasonable said:
Legend11 said:
Reasonable said:
FKNetwork said:
BladeOfGod said:
FKNetwork said:

Activision will be the first of many, PS3 is a TOTAL disaster, always has been always will be, good on Acitivision I say, about time publishers had the balls to say what they really think, now they have came out and said this others will follow as they won't be worried about causing upset to Sony,

No price drop, hard and expensive to make games for, selling poorly, lowest install base, being outsold weekly by wii360, ps3 japan and u.s weekly sales numbers now at the lowest point since 2007, most multiplatform games STILL run/look better on 360 (ghostbusters anyone), high royalties for publishers, charging publishers for PSN bandwidth, list goes on,

Expect Activision to be the first of many, this will be the ultimate downfall and final blow for Sony, bye bye PS3.........

ROFL, keep dreaming

Keep dreaming about what? nothing I said is incorrect and you know it,

Funny isn't it how all of a sudden ps3 owners don't like activision games anyway so don't care if they stop making games for the platform, PS3 fanboy damage control in full swing lmao....

 

Even allowing for higher royalties, going by the numbers showing over 38% of Prototype sales launch week where from PS3 I doubt Activision is in any way, shape or form in a position it can abandon PS3 as a platform.  Lose approx 35% to 40% of most titles sales and associated profits?  Seems unlikely.


Would that really be the case though?  Every time there's a good 360 console exclusive that is also on PC or might be going to PC I notice a lot of PS3 gamers come in and say they'll play it on PC.  Then there are the people that own both consoles and those that would be pushed to buy another console if they felt there were enough good games to justify buying another one.

CoD4, etc. was on PC and that didn't hurt the PS3 sales.  Other titles are console only of course.  IMHO PS3 fans only say that when a title is 360/PC exclusive or if they genuinely play on PC for those titles anyway.  I doubt many PS3 fans really buy on PC vs PS3 unless it was a FPS or RTS and they prefer those on PC.

While they might save some sales via PC I doubt all the PS3 owners who bought CoD4, WaW, Prototype, etc are going to turn to PC.  They stand to lose a lot of sales and they know it.  And while they could shift focus to 360/Wii on the evidence they still stand to lose a lot.  If they did stop with PS3 releases Wii and 360 owners aren't just going to buy more titles because of that.  And I doubt many PS3 players would turn to a Wii version of CoD, or invest in a 360 if they're diehard.  Whichever way I look at it they seem sure to lose a lot of sales IMO.

Look, if they were really losing that much on PS3 they would jsut go ahead and pull support.  They're not.  I believe they don't want to.  I believe they want more 360s and PS3s out there.  Losing a platform is losing the install base.  There is no signal at all that Activision would prefer anything other than more PS3s and 360s sold not less.  I do believe they'd like better royalty terms and are willing to play rought/dirty, etc. to get 'em.

The PS3 install base is already too large to abandon IMHO.  The sales split is too large for most titles, and for some titles its probably closer to a 50% split - note that while FPS, etc. skew to 360 thanks to US a number of other genres result in more or less 50% split across PS3 and 360 thanks to selling more in Others and Japan.  So in some cases they could be looking to lose nearly 50% of the potential sales.

Neither the 360 nor the PS3 is dominant.  The 360 has a nice lead, but apart from a spurt since the price cut most of that is simply time adjusted, and any big developer like Activision knows that (plus I'll be amazed if FFXIII and GT5 in Japan and Others don't close the gap a fair bit).  Activision must know the PS3 hasn't even peaked yet - heck the 360 probably hasn't yet.

They're simply looking to take advantage of the current situation to try and force some concessions from Sony.  They might get 'em (not the price cut but something around royalties) or they might not.  Whether they do or not they're not going to pull the plug on the PS3 (and I doubt they'll pull the plug on the PSP or PS2 either).

 

They would also lose a 100% of the cost...So how exactly would they lose 50% of sales....If for the most part the games sell more on the Xbox 360...Exclusive development for the 360 would cut their cost dramaticly..It's the point he is making when we speaks of the revnue return

PS3 is over 10 mil in UK..I think the GT and FF base are already there....But I can not know for sure...

 

I may be misreading you post - but to lose 100% of the cost then the cost of the PS3 version would have to exactly match the 360 - i.e. if the title cost $10M then it cost another $10M on PS3.  This is extremely unlikely.  Ages ago Ubisoft, for example, were citing releasing on 360/PS3 as having an approx 10% overhead on development - i.e. if the game cost $10M then you could take the view it would cost another $100K to get a PS3 version. They would save the money of the PS3 developtment ..That's what I meant...And yes the company does count sales across all platforms it releases..But if no money goes into a PS3 version of a game...then there is no money or sales lost....If they where to not release a COD game on PS3 they upset the fans..But would not lose any invested capital From what he said it seems the PS3 does not meet their return expectations

I was talking about sales revenue.

A large company has to be profitable, it also has to be large - i.e. they would lose sales units and sales revenue if they didn't support PS3. I understand...But in a scenario where no investment capitol used and no localizing is done for a PS3 version it would not make them less profitable....Since the profits is something the CEO is saying is a problem on the PS3...I also understand that they would lose possible sales to a proven consumer base on the PS3...But as I said before with no investment come no exepectations...It would actually increase their profit per invested capitol if they only released certain games on the Xbox 360...since overall lower dev cost and distributing cost would see them getting an increase in profit margin

Don't be fooled by looking at very old releases, look at something like Wolverine or Prototype.  The PS3 sales units aren't far behind 360.  Without PS3 version those titles weren't going to suddenly sell more anywhere else (360, PC, etc).  So Activision lose those sales and associated revenue and profits. In the case of games like Xmen i see what you mean.....It would of been nice to have seen InFamorus vs Prototype in a exclusive sales battle...For converstaion sake...Maybe Prototype brings in the change they are looking for.

What some are arguing is this makes sense, as they could be more profitable - which is true.  However they then would likely lose their position as the largest publisher right now as that also depends on size - sales volume. I personally feel it's an empty threat and as you said before they might be trying to work an angle on Sony..I don't how they would lose their Position due to the xbox 360 being over 30 mil...and just look at EA. With their whole "360 Maxed out" thing....To me it came of as a part of a "Get moar PS3 owners to buy our games" stratergy...Yet Madden 10 is only advertized for the Xbox 360...Weird

Therefore I doubt they'd drop PS3 unless they were making a loss on recent games, which I doubt because:

a) I doubt having Wolverine, Prototype and recent games on PS3 cost double development of just having them on 360 - I find it hard to believe it added more than 20% max to the development cost I have no Idea if it did or did not....but his statements were post the releases of these game...

b) I doubt Sony royalties are that high they can't make a profit off the PS3 sales of Wolverine, Prototype, etc.  If they were then Sony would have to adjust them as it needs profitable developers working on the platform (BTW I think the royalties is the real issue for Activition here so do I ) Do they have to pay royalties to Sony for using teh Blu-ray format?

c) I don't believe they want to lose the volume of sales they've seeing on PS3 for most decent titles at the moment This kinda brings us back to square one

d) I don't believe they want to limit themselves to US (even though arguably most of their titles do best there) as I believe they want to remain biggest if they can and they'd be hadning EA, etc. an easy weakness to exploit if they stopped supporting a platform that can sell more units of games in Others and Japan In the case of "Others" They would do the Xbox 360 a favor and force fans of their games not buying for 360 to consider getting one...It seems that with the size of Activision and EA that they felt they needed to add their two cents in the console war

e) I don't believe it! I can't believe it's not butter

 

Basically, I don't believe they're trying to do anything other than get their royalty payments adjusted and try and actually grow PS3 install base.  Frankly, I'm amazed that, looking just at sales split of Wolverine and Prototype, and with the iminent hugeness of MW2, anyone thinks they would seriously drop support.  The only valid justification would be the PS3 platform dying, and again I just believe we're past the point of that happening.  There are too many titles coming that are big exclusives over next 12 months, and very probably a price drop, for PS3 to suddenly collapse in the 2010, etc. timeframes Activision cite. It does seem a bit outlandish and if you read between the lines the royalties things is most problable...

 

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.



 
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Reasonable on 24 June 2009
Cueil said:
Reasonable said:
Cueil said:
Reasonable said:
Zizzla_Rachet 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.

 

 



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Cueil on 24 June 2009

Let's take the context of a "What if?" scenario.  What if they did pull support?  What do you think would be the short, medium, and long term effects?  I'll give it my best shot, but you seem to be in a better position to understand the ramifications of such a thing. (this is probably a near worst case scenario for Sony so don't take it to heart)

Short term effects: Loss of profit, Loss of Revenue, layoffs and restructuring the best off the PS3 teams over to PC and 360 dev teams, Some fan backlash and a hit to their reputation.  Deals with Microsoft to co-support their advertising and keep their games near the front of the system's UI.

Medium term effects: With the loss of Activision(two of their to 5 games) Sony sees an earlier plateau of sales then they otherwise would have,  Fans of the Call of Duty/MW series move over to the Xbox 360.  With a more focused development structure they are able to put out higher quality Wii titles(hey we can hope).  Possible Call of Duty:6 use of Natal as a Head Tracker?  Sales possibly reaching or surpassing Halo 3 levels(also a Wii version that kicks ass).  Possible domino effect taking place with smaller developers depending on Activisions moves (Starcraft 2 on 360 or WoW 2 on 360) and moving on to larger developers/publishers.

Long Term effects: Depending on how much or how far the domino effect has gone PS3 sales could be 1-10 million units less than what it should be.  Activision touts their success at using a more focus development style to do more with less people.  They get their point across to Sony and Sony's next console is build with developer needs in mind(hey Krazy Ken isn't in charge anymore).

That's a bad scenario... I could easily see it going the other way though, but it's hard to keep them down considering their big earner is WoW and that wont be effected by this decision at all.



 
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AdventWolf on 30 June 2009

Holy crap this thread has grown! Anyways, the only Activision game I would miss is Call of Duty but MWF2 will be on PS3. People still play Cod4 like mad online.