Activision Threatens To "Stop Supporting" Sony Consoles

[Guest MGS3_GrayFox]

Reveniew is one thing and profit is another. They still lost money. And when they do finally make money they still have all this backlog of debt from R&D and so on still pilling up. It's why they want the PS3 to go for 10 years. It's also why they keep the PS2 going since it brings in some money still.

Sure losing one dev won't kill you, but treat one like crap in some form, and what's to stop others from having a fall out with you later? I'd rather not lose respect period.

Uh, SCE had a 10% increase in profit last year. It was this division that cut Sony's loss by a great margin.

[El-Diablo]

What you people are all forgetting is development costs. I know some have mentioned it but the sony fanboys, are seriously missing this. The cost to code and develop a game on the PS3 is alot higher. Numerous devs have said this. It isn't them being lazy, it was the same with the PS2. Sony has made their console difficult to create content for. Sure you can stick linux on it, play blu ray and all that jazz and that's awesome. I don't own a PS3, but if it was cheaper, and i wasn't about to put together a HTPC, i'd get one. I commend activision for this action, and sure, Sony has God of War, and other exclusives, but you can't survive on exclusives alone it just won't fly. It's far too bad their console wasn't easier to develop on, cause i'm sure if it was they'd be ruling the market as they did in the previous gen. However this time it seems microsoft has a leg up.

Say what you will, but my opinion is sony does need to drop their arrogant ways and hopefully developers will get better support and help for creating titles. It'd be a shame to lose a competitor and have M$ own the console market. (i'm not dragging the wii into this at all as i don't see it in the same class as these two consoles)

[George P Global Moderator]

what part of "considering overhead" do you not understand?

And I'm saying, how much is that exactly? You used $60mil as a figure so I went with that. How much does activision finally get outta that $60m? You say "overhead" like it's a small piece of the pie, but is it?

[George P Global Moderator]

Uh, SCE had a 10% increase in profit last year. It was this division that cut Sony's loss by a great margin.

Are you sure? As was quoted from the article in another post....

"It is not a very subtle hint, although Mr Kotick says his company paid $500 million to Sony in royalties and other goods last year, which ?probably still worked out at 400 per cent of the profit they made?. Actually, Sony's games division lost $597 million last year,"

So, that's what I went with right there.

[ienhz]

Uh, SCE had a 10% increase in profit last year. It was this division that cut Sony's loss by a great margin.

Sony's games division reported a loss of 124.5m USD in 2008 and a loss of 58.5m USD (597m after conversion from yen to USD) in 2009. There's no way they made a profit.

[soniqstylz]

What you people are all forgetting is development costs. I know some have mentioned it but the sony fanboys, are seriously missing this. The cost to code and develop a game on the PS3 is alot higher. Numerous devs have said this. It isn't them being lazy, it was the same with the PS2. Sony has made their console difficult to create content for. Sure you can stick linux on it, play blu ray and all that jazz and that's awesome. I don't own a PS3, but if it was cheaper, and i wasn't about to put together a HTPC, i'd get one. I commend activision for this action, and sure, Sony has God of War, and other exclusives, but you can't survive on exclusives alone it just won't fly. It's far too bad their console wasn't easier to develop on, cause i'm sure if it was they'd be ruling the market as they did in the previous gen. However this time it seems microsoft has a leg up.

Say what you will, but my opinion is sony does need to drop their arrogant ways and hopefully developers will get better support and help for creating titles. It'd be a shame to lose a competitor and have M$ own the console market. (i'm not dragging the wii into this at all as i don't see it in the same class as these two consoles)

^^^ If you're making profit on a game, costs don't matter -- you're losing money by restricting your market. Unless you're catering to the idea that you'll make a better game by developing for one console (MGS4, Insomniac Games, newer Bungie games), you're turning down money in a down economy.

Like I pointed out in the case of CoD5. Taking conservative estimates, let's say it has sold 1.5 million copies worldwide for PS3 in 7 months on the market (it sold 1/3 of that in one month in the US alone). That's $90 million in total revenue. Taking a conservative guess, percentages for retailers, marketing, Sony's royalties, manufacturing, etc., let's say $40 million of that came back to Activision. If the game cost $10 million to make, that's $30 million in lost revenue in a down economy, for one game.

Guitar Hero -- they could sell a game of fart noises and make a profit, especially considering peripheral sales.

If a major 3rd-party developer has a major game that doesn't sell well enough to make a profit, they're doing it wrong, or it's a crap game anyway. There are more PS3's out there now then there were XBox 360's at this time last year. I don't think game costs have skyrocketed much in the last year.

Edited June 19, 2009 by soniqstylz

[+Audioboxer Subscriber²]

I can see the carnival of stupid is still going strong :p

Shame people glossed over my serious reply on page 2. Activision have heavy hitting titles coming out later this year they expect to make millions from, this is merely business "tactics" to try and force/confirm Sony's hand into price cutting around/before/in time for these Activision franchises.

Especially Tony Hawks Ride which looks to be a massive financial gamble.

And it's worked, look how quickly Sony replied, journalists ran the headline and gamers spent hours arguing that Sony is in trouble and activision is seriously considering ditching them... It draws more attention to the elephant in the room which is the PS3 price.

Genuinely believing such a dominant 3rd party who rakes in cash on the 360 and PS3 would drop support without seeing dire platform sales first just goes to show some of the business acumen around here.

Not trying to offend anyone with that statement by the way, it's just the way it is.

[El-Diablo]

bleh, nevermind, honestly i don't care what happens. All i'm saying is it's a shame that sony didn't make their console easier to program for.

[jonhapimp]

I can see the carnival of stupid is still going strong :p

Shame people glossed over my serious reply on page 2.

fanboys tend to skip over things like that

[soniqstylz]

And I'm saying, how much is that exactly? You used $60mil as a figure so I went with that. How much does activision finally get outta that $60m? You say "overhead" like it's a small piece of the pie, but is it?

http://kotaku.com/5161882/so-which-console...tivisions-bread

For 2008, PS2 and PS3 accounted for over $500 million in revenue back to Activision. Not counting the PSP (let's say they account for 20% of the number shown), so now you're talkng nearly another $50 million back to Activision, out of over $3 billion, or about 15% of total revenue, which doesn't sound like much, except for the fact that the "Sony consoles" combined bring in more than the XBox 360.

That's lost money in Activision's pockets.

edit: ****, that's a run-on sentence if I ever saw one.

[Bhav]

Are you sure? As was quoted from the article in another post....

"It is not a very subtle hint, although Mr Kotick says his company paid $500 million to Sony in royalties and other goods last year, which “probably still worked out at 400 per cent of the profit they made”. Actually, Sony's games division lost $597 million last year,"

So, that's what I went with right there.

Sony's games division reported a loss of 124.5m USD in 2008 and a loss of 58.5m USD (597m after conversion from yen to USD) in 2009. There's no way they made a profit.

Some people really need to learn to understand English. MGS3 never said they made a profit. SCE accounted least for Sony's overall loss - it was a highly successful year despite what some people may tell you ;)

Edit: MGS3 did say SCE made a profit lol sorry. Still, they accounted least for Sony's loss :p

Edit 2: Sony's Gaming division loss in the last financial year (March 08 to 09) was much lower than the previous financial year. It still made a loss, but both hardware AND software sales increased for both PS3 AND PSP.

Edited June 20, 2009 by Bhav

[bob_c_b]

I read his post as being about XBox 360 console sales tripling.

I don't particularly buy that either, since I think that most of the audience for CoD4 has both consoles, and just picks the version that plays on the controller they prefer or the one their online friends have.

Considering COD4 sold over 11 million copies on the 360 and about 4.5 million on the PS3 I don't think that is likely. I think the whole multi-console owner thing is overblown, I think most people own one or the other. The Wii might be the exception to that, but between the 2 HD consoles, not so much.

[Boz]

I read his post as being about XBox 360 console sales tripling.

I don't particularly buy that either, since I think that most of the audience for CoD4 has both consoles, and just picks the version that plays on the controller they prefer or the one their online friends have.

+1.. finally a decent response that actually discussed the point of a post instead of attacking me directly.

I do disagree.. I think that sales would most likely jump quite a bit for Xbox 360 (let's put it that way) if PS3 owners couldn't get Activision games. They would most likely be forced to buy an Xbox 360 and those who were considering a PS3 knowing that multiplatform titles like MW2 would come to PS3 would now think twice and most likely buy a 360. Activision is the largest game publisher. That's not one game we are talking about. Especially with Natal and other things in the pipeline, Activision dropping Sony would be a serious turn of events where I don't think Sony could recover from.

[Guest MGS3_GrayFox]

Some people really need to learn to understand English. MGS3 never said they made a profit. SCE accounted least for Sony's overall loss - it was a highly successful year despite what some people may tell you ;)

Edit: MGS3 did say SCE made a profit lol sorry. Still, they accounted least for Sony's loss :p

Edit 2: Sony's Gaming division loss in the last financial year (March 08 to 09) was much lower than the previous financial year. It still made a loss, but both hardware AND software sales increased for both PS3 AND PSP.

I said that the SCE has a increase of 10% in profit, never said it was a positive one (the decreased their losses in 10% if you want to see it that way).

And yes, SCE accounted the least of the whole Sony's loss.

Sorry for the misunderstanding.

[Kreuger]

Im pretty sure that games like Guitar Hero and Call of Duty generate enough cash flow for anybody. And therefore, someone would easily be willing to take over publishing them

[Dead_Monkey]

Sony does need to cut prices. im interested in a playstation 3 and have been, but they just cost way too damn much.

walmart has bluray players for sell now for $128. Arent that expensive anymore. Which i thought was why the ps3 cost so much compared to the wii.

This is a good point. I had a 20gig PS3, but just this past week I flipped it on craigslist to put together the scratch for a top of the line LG Blu player. If/when the software story for PS3 exclusives starts turning around, I'll buy another one after a price drop.

Sony would have much more to worry about if EA dropped them, or even possibly Take2, because they have the high profile sports franchises (probably less Take2, because Sony has their own very good baseball title). Sony and EA have a full portfolio of games between them that compete with Activision's big titles.

[soniqstylz]

This is a good point. I had a 20gig PS3, but just this past week I flipped it on craigslist to put together the scratch for a top of the line LG Blu player. If/when the software story for PS3 exclusives starts turning around, I'll buy another one after a price drop.

Sony would have much more to worry about if EA dropped them, or even possibly Take2, because they have the high profile sports franchises (probably less Take2, because Sony has their own very good baseball title). Sony and EA have a full portfolio of games between them that compete with Activision's big titles.

That's a good point. I'd say that losing a franchise like Madden would boost other console sales more than Activision games -- lose Guitar Hero, still have Rock Band (or even expand on SingStar -- RockStar?). Lost CoD, still have any of the 289475794857 other shooters. Lose Madden, you can't make up for that. That's a franchise that still moves PS2's for godsake.

But, again, EA would be shooting themselves in the ass -- the bulk of their revenue comes from Sony. I'll find the thread here in a minute.

edit: Ars article - http://arstechnica.com/gaming/news/2008/05...re-for-sony.ars

Edited June 20, 2009 by soniqstylz

[TDQuiksilver]

This would be committing suicide. With today's economy they need every penny they can get - and they know it.

[ienhz]

I said that the SCE has a increase of 10% in profit, never said it was a positive one (the decreased their losses in 10% if you want to see it that way).

And yes, SCE accounted the least of the whole Sony's loss.

Sorry for the misunderstanding.

I really think people should have an understanding of the statistics/figures they're providing before they use them.

Profit always implies positive. It's the net of what they earn after paying out the associated fixed and variable costs; you can't have negative profit - that's a loss. I believe the term you're looking for is revenue.

[spenser.d]

This would be committing suicide. With today's economy they need every penny they can get - and they know it.

They're getting plenty of pennies from WoW ;)

-Spenser

[Ji@nBing]

Im pretty sure that games like Guitar Hero and Call of Duty generate enough cash flow for anybody. And therefore, someone would easily be willing to take over publishing them

Except that Activision owns both the studios that make those games, as well as the IP's. So if they don't want it on PS3, no one else is going to be able to pick them up and make PS3 versions.

[bob_c_b]

+1.. finally a decent response that actually discussed the point of a post instead of attacking me directly.

:cry:

[soniqstylz]

Except that Activision owns both the studios that make those games, as well as the IP's. So if they don't want it on PS3, no one else is going to be able to pick them up and make PS3 versions.

But they are perfectly capable of farming it out to a third party for cheaper development, ala Orange Box, or letting someone else publish the PS3 version, ala Oblivion on 360/PC (2K) vs PS3 (Bethsoft).

[Boz]

But they are perfectly capable of farming it out to a third party for cheaper development, ala Orange Box, or letting someone else publish the PS3 version, ala Oblivion on 360/PC (2K) vs PS3 (Bethsoft).

If it comes to this, that Activision indeed wouldn't publish their games on PS3 and PSP platform, I don't think they would give anyone their IPs.

I do think it's highly unlikely. Sony will do everything they can to keep them under the table. We know their dedication in the fight for Blu-ray and this is no different. They will give Activision whatever they can to keep them. They'll give them money, offer replication costs, marketing costs and so on and probably guarantee PS3 price drop which is coming anyways if they want compete at least. So this will blow over. But I don't like the response they gave Activision. They seem to be saying "Oh we have a few great games coming out and we don't really care if you are upset" which is what "might" lead Activision to play hardball as well. They are one of the publishers who really doesn't need PS3 to generate profit.

I think personally that Activision is ticked off because Sony killed their sales of Prototype with Infamous. It wasn't cool if you really look at it.

Prototype has been hyped up in news and PR plus marketing for over a year now and Activision paid quite a bit for that in order to promote the game and create interest and then Sony goes out and releases pretty much identical game a week or so before Prototype release effectively canibalizing sales for Activision. Prototype is a great game and arguably (at least to me) a better game than Infamous but Sony really screwed Activision over.

This is what I mostly like about Microsoft in this area. They really encourage 3rd party devs to make kick ass games and they don't effectively compete with them allowing maximum profits for game publishers. They even help them in promoting games despite the fact that the game will go on competing platform as well.

I think Prototype was one of the major reasons why Activision got pi*sed off and I'm sure they mean what they say. PS3 sales of Prototype have been super poor due to Infamous. People who wanted this type of game on PS3 would've gotten Infamous rather than Prototype.

[Bhav]

I really think people should have an understanding of the statistics/figures they're providing before they use them.

Profit always implies positive. It's the net of what they earn after paying out the associated fixed and variable costs; you can't have negative profit - that's a loss. I believe the term you're looking for is revenue.

hahaha..sorry, for you to say that others should have an understanding of statistics is hilarious.

You can have negative profits...and yes, that is the same as a loss (trust me...I know). MGS3 was not talking about revenue, he was talking about operating profit (go and read Sony's financial statements)

Thanks for clarifying what you meant MGS3.