Activision CEO: “We Might Have To Stop Supporting Sony”

[Akumajou]

I'm curious why you guys think this is in the realm of impossibility. Sure, not in the next one or two years while the console landscape stays the same, but what about when a new machine comes out, like an Xbox 720? You all know very well about the cost, difficulty and support issues on PS3, or at least you should know if you have read my posts over the past few years You also know that publishers have finite budgets. So why do you think it's impossible that a major publisher would drop PS3 in a few years and instead shift all those dollars to a new cash cow?

The cost, difficulty and support issues? Are you saying that by xbox 720/natal launch the PS3 is going to remain the same?

The rumored xbox 720/natal specs make a lot of sense as something to realisticaly expect out of Microsoft to continue using their Direct X based api console. However last gen the PS2 started as the hard to, difficult, etc console and by 2005 people are calling it easy, cheap to develop for or am I missing something?

 

[Squilliam]

You guys might be interested in reading this

http://www.1up.com/do/newsStory?cId=3156044

Wouldn't the situation be different for a multiplatform game rather than a high profile Xbox 360 exclusive in regard to the royalties paid to the console owner?

 

[Akumajou]

You guys might be interested in reading this

http://www.1up.com/do/newsStory?cId=3156044

I just love the first comment posted back in 2007 basically asking why gamestop sells the used copy for $45.

Its just priceless that some overpaid jerk is not really going after the true source of their game sale losses.

 

[joker454]

The cost, difficulty and support issues? Are you saying that by xbox 720/natal launch the PS3 is going to remain the same?

The rumored xbox 720/natal specs make a lot of sense as something to realisticaly expect out of Microsoft to continue using their Direct X based api console. However last gen the PS2 started as the hard to, difficult, etc console and by 2005 people are calling it easy, cheap to develop for or am I missing something?

Xbox 720 and Natal are completely different things, one has nothing to do with the other. Natal is just an add on that might be bundled in its own package with a standard or maybe slimmed down 360. PS2 isn't comparable to anything either, it was in it's own league. Not supporting it would have been fiscal suicide.

What I'm saying is that in two or three years when we all have Xbox 720 and/or WiiHD kits, all publishers will have to make a choice. They will need engineers to support these new platforms because getting in on the ground floor is key. Will they go to the expense of hiring all new people, or will they shift people away from existing product? I think that is what that dude at Activision is contemplating. No one is dropping support now, but when the new machines come around they might. Mind you I doubt it would be a full fledged pull out, keep some key franchises that make major coin and ditch the rest. Now it's likely this is all saber rattling as others have said, but it's also possible that they projected out a few years, estimated where they thought PS3 pricing would be in two or so years and didn't like what they saw, hence his comment.

 

[Brad Grenz]

A generational shift is a completely different topic, though. We've seen both Nintendo and Sony go from undisputed dominance to distant third in a generational shift so there's no sense assuming that Nintendo and Microsoft's next systems will be the platforms to support 3 or 4 years from now. So if you are asking if it is reasonable to assume in such a time frame as the new generation starts to hit will development wind down on legacy platforms like the PS3 (and 360 and Wii)? Well, that's a big fat no d'uh! But it's pretty absurd to start talking as if developers will drop Playstation completely without even seeing what Sony brings to the table. For all we know the new efforts by major publishers to chase Wii profits may come to bite them on the ass in the next two years. It's still a pretty big unknown what the appetite for non-Nintendo games will be among Wii owners going forward.

 

[joker454]

But it's pretty absurd to start talking as if developers will drop Playstation completely without even seeing what Sony brings to the table. For all we know the new efforts by major publishers to chase Wii profits may come to bite them on the ass in the next two years. It's still a pretty big unknown what the appetite for non-Nintendo games will be among Wii owners going forward.

Well I think when he says "drop Sony" that he really means just current gen Sony stuff, it would be silly to go beyond that. It's still odd for a major player to be so public about their grievances. Then again EA managed to muscle Microsoft many years back, so I guess Activision is trying the same with Sony.

 

[Squilliam]

Well I think when he says "drop Sony" that he really means just current gen Sony stuff, it would be silly to go beyond that. It's still odd for a major player to be so public about their grievances. Then again EA managed to muscle Microsoft many years back, so I guess Activision is trying the same with Sony.

Also sometimes it seems that public statements can help in behind the scenes negotiations as well im betting. Its like with Rage and ID with the issue of the Xbox 360 per disc royalties, they made a public statement likely to help make some headway in the behind the scenes negotiation. Perhaps they want something from Sony, which Sony is reluctant to give?

 

[assen]

I heard (this is hearsay) that Sony charges a lot more for the dev kits than microsoft.

But in terms of actual, game licensing fees, sony is cheaper.
Sony = $12 per game
Microsoft = $15 per game

Do you have a quote for this? I'm pretty certain they both are $10, although I have no official info of any kind.

But the royalties are per disk printed, not sold.
So the trouble with PS3 is not _low_ sales, it's consistently underestimated sales. If Activision keep believing vague hints at a price drop from PS3 and print huge amounts (and you don't want an insufficient supply of something like Transformers or Guitar Hero at retail!), and overestimate by 2x, they'll effectively be taking a $20 hit per copy sold, not $10. For a blockbuster game, this "overprint loss" can easily exceed the cost of the port itself.

Publishers are all about predictability.

 

[draconian]

Do you have a quote for this? I'm pretty certain they both are $10, although I have no official info of any kind.

But the royalties are per disk printed, not sold.
So the trouble with PS3 is not _low_ sales, it's consistently underestimated sales. If Activision keep believing vague hints at a price drop from PS3 and print huge amounts (and you don't want an insufficient supply of something like Transformers or Guitar Hero at retail!), and overestimate by 2x, they'll effectively be taking a $20 hit per copy sold, not $10. For a blockbuster game, this "overprint loss" can easily exceed the cost of the port itself.

Publishers are all about predictability.

per printed? I'm sorry but that's just unbelievable. How would either sony or MS even know you printed it unless you as the publisher told them? It would have to be sales or shipped. And even then, the license fee given to SONY/MS is reported in good faith by the publisher.

Also, if you look at worldwide sales for 3rd parties on both platforms, they are pretty even. Going by your logic, most publisher would be losing money on the xbox release since they would be printing an amount that should match the install base for xbox while the sales aren't matching up.

 

[assurdum]

SO he believe any price drop before 2010? And he stop to produce COD too on the ps3? One of the most seller title on the ps3 ? Really? Oh come on Where he came from?

 

[-tkf-]

SO he believe any price drop before 2010? And he stop to produce COD too on the ps3? One of the most seller title on the ps3 ? Really? Oh come on Where he came from?

Well we did bite his cake

These forums used alot of time making an argument that the cost on content is what make up the bulk budgets.

Spreading that investment over several platforms makes sense, shutting down 20+ Million customers because they have to use more resources on the development seems crazy when they alread used so much money on Content.

 

[Laa-Yosh]

You guys might be interested in reading this

http://www.1up.com/do/newsStory?cId=3156044

Hmmm... according to this, the dev gets almost 50%, and the publisher almost nothing; I find that pretty hard to believe even for Epic and Gears.

In reality, it's more like a moving target; the publisher finances development, marketing and other costs, and the dev won't get any royalty until the project breaks even. Some devs have even worse conditions with royalty.

Then the royalty itself is a changing percentage depending on how much the game sells.

All in all the average studio makes very little money, the strong independents make a lot, and the rest of the games are developed at internal studios for Ubi, Sony and so on.

 

[assurdum]

Well we did bite his cake

These forums used alot of time making an argument that the cost on content is what make up the bulk budgets.

Spreading that investment over several platforms makes sense, shutting down 20+ Million customers because they have to use more resources on the development seems crazy when they alread used so much money on Content.

Well, I have though, COD a part, how many titles activision really producing with the same quality? I mean yeah probably it's true, to develop on the ps3 is too expansive but third parties gain enough on the ps3 when a title deserve until now, I haven't seen yet a good title who sell on 360 and passed totally ignored on the ps3... seriously, why indeed to give the responsibility only to sony low ratio and strategies don't think of its strategies and how many titles has real so good to deserve more selling on the ps3? It isn't the same if sony would said why activision don't cut the price of these peripheral because these games don't sell enough? Meh....

 

[RancidLunchmeat]

<Drunken rant deleted>

Bahh..

It was full of wonderful points, but it was lengthy and probably would have resulted in flame wars so I've snipped it.

Mod : Good for you! Self moderation for the win!

 

[Barbarian]

I'm curious why you guys think this is in the realm of impossibility. Sure, not in the next one or two years while the console landscape stays the same, but what about when a new machine comes out, like an Xbox 720?

I think it would be even more relevant with WiiHD.
My team usually develops simultaneously on X360 and PS3.
The sales on PS3 are not great and we wish all the time we can do the Wii version as well but the complexity of scaling assets between Wii and X360/PS3 is just too much for one team.
But with WiiHD in the picture (assuming decent GPU) this changes things dramatically - I'd switch to X360/WiiHD simultaneous development in a heartbeat.

PS: Publishers pay fees per manufactured discs (yes, definite risk) and last gen the fees were sub $10, I suspect they haven't changed this gen.

PPS: We get pressure to deliver "on-par" experience on 360/PS3 and that's because of good relationship with Sony, but imagine what will happen if this is "relaxed". Trust me the X360 is not "maxed out". People who say that are idiots.

 

[AzBat]

<Drunken rant deleted>

Bahh..

It was full of wonderful points, but it was lengthy and probably would have resulted in flame wars so I've snipped it.

Yes, it was, great read nonetheless. Don't cut yourself too short.

Tommy McClain

 

[Laa-Yosh]

<Drunken rant deleted>

Bahh..

It was full of wonderful points, but it was lengthy and probably would have resulted in flame wars so I've snipped it.

Drunken rants are cool, though... The stuff we talk about with collegues at company events is always cool

 

[joker454]

I think it would be even more relevant with WiiHD.

Yeah definitely WiiHD as well, there's all sorts of interest in Wii in general. But where to get the money from to support it? Hmm...

PPS: We get pressure to deliver "on-par" experience on 360/PS3 and that's because of good relationship with Sony, but imagine what will happen if this is "relaxed". Trust me the X360 is not "maxed out". People who say that are idiots.

I chuckle at the "maxed out" comments It's unfortunate that there really is no equivalent to Naughty Dog on the 360, as in there is no dev team extracting every ounce of performance out of it. Alas, 99.9% of 360 development is all effectively treated as multi platform even for 360 only games, so there is nothing out there yet that really cleverly uses the machines hardware advantages.

SO he believe any price drop before 2010? And he stop to produce COD too on the ps3?

If COD makes good coin then keep it. They probably have lots of other product they could cut though, and use those resources to make more money elsewhere. They are not interest in making profit, they are interested in making stupidly large amounts of profit. Here's an example on the EA side. EA once bought a company that I worked for. That company was profitable. So EA kept it right? Nope, first thing they did was shut it down. The reason was simple, it made profit but not the profit they were looking for. So *poof*, a whole profitable studio gone with the stroke of a pen. Activision surely has lots of stuff that makes small profit on PS3 that could be considered expendable. There is no reason to drop COD though if it's making them bank.

 

[ban25]

per printed? I'm sorry but that's just unbelievable. How would either sony or MS even know you printed it unless you as the publisher told them? It would have to be sales or shipped. And even then, the license fee given to SONY/MS is reported in good faith by the publisher.

The console platform holders handle replication and they require minimum runs.

 

[tuna]

I think it would be even more relevant with WiiHD.
My team usually develops simultaneously on X360 and PS3.
The sales on PS3 are not great and we wish all the time we can do the Wii version as well but the complexity of scaling assets between Wii and X360/PS3 is just too much for one team.
But with WiiHD in the picture (assuming decent GPU) this changes things dramatically - I'd switch to X360/WiiHD simultaneous development in a heartbeat.

Wouldn't the optimal business strategy be to deliver X360/PS3/WiiHD versions of your game(s)?