Activision “Might Want” to Drop Game Development for PlayStation 3, PlayStation Portable

Activision Insists on Necessity to Cut the Pricing of PS3, PSP

by Anton Shilov
06/19/2009 | 12:01 PM

Robert Kotick, chief executive officer of Activision, said in an interview that the world’s largest game publisher might want to cease developing games for Sony PlayStation 3 and Sony PlayStation Portable since such titles do not generate desired return on investment. As a solution, Mr. Kotick demands Sony to cut pricing of the PS3 and PSP to sell more units, which will automatically make the platforms more appealing to game developers.

 

“I am getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they do not make it easy for me to support the platform. It is 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,” said Bobby Kotick in an interview with Times Online.

The claim of Mr. Kotick seems to be reasonable: the PlayStation 3 is the worst selling game console of this generation, it is behind Microsoft Xbox 360 and considerably behind Nintendo Wii. Moreover, the PS3 is powered by Cell processor, which makes the platform rather uneasy to develop for, according to many developers. As a result, video game designers have to spend more on development for the PlayStation 3 (compared to Xbox 360 or Wii) and address smaller market compared to other two consoles.

“They have to cut the price, because if they do not, the attach rates [the number of games each console owner buys] are likely to slow. If we are being realistic, we might have to stop supporting Sony. When we look at 2010 and 2011, we might want to consider if we support the [PS3] console and the PSP [portable] too,” added Mr. Kotick.

Lowering the pricing on PlayStation 3 and PlayStation Portable would catalyze more people to acquire the systems and buy more games, which would push earnings of both Activision as well as Sony Computer Entertainment, which receives royalties for every game that Activision and others sell. Another way to “please” game developers would be cutting royalty payments on titles.

It is by far not the first time when Robert Kotick publicly demands Sony to lower the price of the PlayStation 3. However, this is the first time when the chief executive of the world’s top game publisher threats SCEI to stop developing games for the latest platforms.