Meredith Sweet

In an interview with British newspaper The Times, Activision CEO Bobby Kotick said that his company, the world’s largest publisher of third-party games, including mega-hit titles such as World of Warcraft, Guitar Hero, Call of Duty, and Tony Hawk: Ride, might have to stop supporting releases for Sony’s PlayStation 3 and Playstation Portable consoles unless Sony drops the price.

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.

Kotick added, “Activision’s royalties and other goods paid to Sony last year, totaling some $500 million, probably still worked out at 400 per cent of the profit they made.” Sony’s games division lost over $597 last year, and Kotick’s statement seems to indicate he thinks the company’s losses will mount if they don’t adjust the prices on their consoles.

Word exploded all over the Internet about Kotick’s statement, spreading virally from Kotaku to Engadget, with supporters on both sides of the fence: those agreeing with Activision’s Kotick that Sony’s not churning out titles the way they used to, and the PlayStation consoles are overpriced, and those that think Sony’s innovating with a game console and media center, and they’re coming out with hit titles like never before.

At E3 Expo, Sony announced PSP releases for popular titles Gran Turismo and Resident Evil, along with PS3-exclusive releases of Final Fantasy XIV, despite the fact that Final Fantasy XIII isn’t even out yet. Some 364 titles will be released for the PlayStation platforms in 2009-2010, even after 2008-2009 broke records for the number of games released for the Sony devices. These kind of numbers would seem to blow Kotick’s statements about Sony “losing momentum,” wouldn’t they?

To further douse the fire set by Kotick, Sony PlayStation spokesperson Patrick Seybold said that “PlayStation has tremendous momentum coming out of E3, and we are seeing positive growth with more than 350 titles slated to hit across all our platforms, including many anticipated games from our publishing partners.”

In one corner, you’ve got Activision, publisher of some of the most popular games on the market. Were CEO Kotick’s words to have any weight to them, millions of gamers would find themselves having to acquire new systems to keep up with the latest games. Then again, the average gamer already owns at least two current-gen systems, right? Activision could feasibly pull their support of the Sony systems and gamers would continue on as normal, bringing in the bucks for Activision and still enjoying their games as normal. Oh, and Activision would save that $500 million in royalties Kotick was griping about paying to Sony. Those royalties that were supposedly such a huge chunk of Sony’s profits last year.

In the other corner, there’s electronics mega-giant Sony, with the PlayStation 2 still going strong, the PlayStation 3 and PSP gaining support, and the new PSP Go ready to hit the market soon. If Activision is a games giant, then Sony is Godzilla: no contest, right? Where does a game publisher of any size get off threatening Sony?

Of course, from the consumer end, Activision’s statements are coming from a reasonable place: with game systems big and small costing at least $150 and more like $250 or more and games themselves anywhere from $25 to $65 a piece, being even a “casual” gamer these days isn’t cheap. Game publishers can only afford to knock game prices down so much, especially third-party publishers like Activision, who have to parse out the profits to other companies. But Sony gives a chunk of change to the companies that sell the PlayStation systems and that’s it–the rest is profit for them. Aren’t they in a better position to do as Activision’s Kotick so subtly “suggests,” and lower the price of their consoles?

If it came down to doing without Activision titles on your preferred Sony system or a cheaper Sony system (whether or not you already own one; run on the assumption that Sony wouldn’t offer rebates of $100 a’la Apple with the iPhone), what would you  choose?

(Source: The Times UK)