Will Activision Kill Sony?

The Sony (NYSE: SNE  ) PlayStation 3 is starting to look shaky in an otherwise brilliant video game market. I'm not sure the console will survive another year.

Despite being the most impressive technical specimen on the market, with unique Blu-Ray playback features and custom-built IBM (NYSE: IBM  ) chips that also can power supercomputers, the PS3 has failed to impress a nitpicky gaming market. Microsoft's (Nasdaq: MSFT  ) Xbox 360 and the Nintendo (OTC BB: NTDOY.PK) Wii keep running circles around the PS3, saleswise. The system's unique hardware also makes it harder and more expensive for game designers to bring their wares to the PS3.

The PS3 was always meant to last for a very long time. It took about five years for Sony to start making a profit from the PlayStation 2, and the PS3 was supposed to follow the same path as a media-center powerhouse with gaming roots. Three years into the system's life cycle, Sony's gaming division is still bleeding cash every quarter. And now the industry itself is starting to lose patience with Sony.

"Games generate a better return on invested capital on the Xbox than on the PlayStation," says Activision Blizzard (Nasdaq: ATVI  ) CEO Bobby Kotick. "They have to cut the price, because if they don't, the attach rates [of game sales for the PS3] are likely to slow. If we are being realistic, we might have to stop supporting Sony."

Ouch. Kotick is wielding a big stick, because Activision has leapfrogged Electronic Arts (Nasdaq: ERTS  ) to become the biggest video game producer in the world. And he ain't speaking softly to Sony.

Reports of new upgrades to the PS3 ecosystem are coming in, but they seem to indicate the wrong kind of changes. The systems are getting bigger and stronger, but not necessarily cheaper. Sony couldn't have predicted the global economic downturn any more than you, I, or the competition -- but the company sure could have handled it better.

Unless the PS3 finds some way to entice more consumers to pay up for its classy but expensive wares, Kotick might take Guitar Hero, Tony Hawk, Call Of Duty, and a host of other crowd-pleasing franchises -- and go home. And if the biggest producer can't afford to make PS3 titles, the smaller players could soon follow suit. By the time Take-Two Interactive (Nasdaq: TTWO  ) announces an Xbox-only Grand Theft Auto title, it'll be too late.

The time to act is now, Sony. Give me cheaper systems or give me death. For your sake, I hope that the rumors of a less expensive PS3 Slim model are correct.

Game on, Fool:

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Take-Two Interactive Software is a Motley Fool Rule Breakers recommendation. Activision Blizzard, Electronic Arts, and Nintendo are Motley Fool Stock Advisor selections. Microsoft is a Motley Fool Inside Value recommendation. Nintendo is a Motley Fool Global Gains pick. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Anders Bylund owns shares in Take-Two, but he holds no other position in any of the companies discussed here. OK, he's also addicted to Guitar Hero and its ilk. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


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  • Report this Comment On July 02, 2009, at 11:29 AM, Link01 wrote:

    Are you people arrogantly stupid to say that a console with a 23-24 million user base is struggling. What the hell is wrong with the media nowadays?

  • Report this Comment On July 02, 2009, at 11:45 AM, calactyte wrote:

    Hello Anders Bylund. I'd like to clear some confusion for other Fool investors who might misunderstand what you've written here.

    I'm going to try my best not to be insulting when I say that what you've written is so so far from the truth about Sony or Activision that I'm actually a little bit embarrassed for you.

    I'm a game developer, avid game player and fellow fool member so let me explain this. First off my own opinion is that Activision is bluffing. They make a KILLING off of the Playstation 3 and the statements that were made regarding the price of the PS3 were merely scare tactics. That's just my opinion.

    From a factual stand point, you mentioned that if Activision pulled support for PS3, Sony would lose a bunch of popular franchises. Would that hurt the Playstation brand vs. its competition? Yes. Would it kill that system? No way. Never. Ever Ever Ever Ever. I can't stress how far off the mark you are with this. Activision represents ONE publisher of the MANY supporting Sony.

    Also since Blu-ray is the video format war winner, trust me the Playstation 3 is here to stay. I own a PS3, and an Xbox 360. I see the strengths and weaknesses in both systems. But the loss of one publisher cannot and would not kill a system. I know everyone here at Fool.com thinks that Activision is just a swell company and there is no denying their success, but you have to put this in perspective. Activision is overestimating their importance in the great scheme of things. Also if I'm an investor and I watch the CEO Bobby Kotick make a statement such as the one he made and then actually follow through by dropping support for a system that his company profits on; then I sell those shares as quickly as possible. That would represent poor leadership and a lack of regard for his fiduciary responsibilities as CEO.

    Thanks

    Cal

  • Report this Comment On July 02, 2009, at 12:55 PM, esxokm wrote:

    Anders,

    I personally thought your article was great. While I agree that Kotick would never pull support for PS3 in terms of franchises such as Call of Duty, who knows about other games that aren't so hardcore.

    As for the person who commented that the PS3 isn't struggling, well...let's just say we'll have to disagree.

    And Cal's argument about Blu-ray? At this point, oddly enough, I don't believe it means a thing. Blu-ray winning the format war does not confer an element of immortality to the PS3. If anything...remove it! Make the system cheaper. (And yes, it can be done...)

  • Report this Comment On July 02, 2009, at 1:01 PM, Soniq wrote:

    I have to agree with Cal above. There are certain passages in your article that are quite misleading.

    First, Activision jumped EA as the world's biggest game publisher on the strength of its aquisition of Blizzard, developers of World of Warcraft, which is a money-printing machine. Without WoW, Activision doesn't have the financial muscle to bluff pushing away over $600 million in yearly revenue that comes from the Playstation brand (PS3, PS2, PSP).

    On the same note, Activision's Guitar Hero franchise makes great use of Sony's music division, which most certainly would be lost, and possibly placed under exclusivity with EA/Harmonix's Rock Band.

    The last thing I'd like to note is that while you say that Microsoft's console is "running circles around" Sony, looking at the first 30 months of each console's lifespan, the Playstation 3 has outsold the XBox 360.

    http://vgchartz.com/hwlaunch.php?cons1=PS2&reg1=All&...

    Essentially, this was merely a bluff to increase revenue and profits by hoping that Sony cuts the price (and releases the PS3/Slim) to spur console sales before the holiday, thereby spurring sales of some of Activision's bigger console franchises (new Call of Duty, Guitar Hero 5, etc.)

  • Report this Comment On July 02, 2009, at 1:03 PM, Lugoves wrote:

    I'm with Cal on this one. Our Household has 3 PS3, so I'm not the Average Demographic. The developers Difficulty does rely on Programming to the SPUs thus challenge is Met with reward, as the cell processing/programming takes hold and IMO becomes integral in the future. I anticipate Sony is going to have a *Price Drop* on the *Fat* PS3 SKU w/o Backward compatibility & The Slim and/or return of the Backwardly compatible PS3 will remain *Premium* priced. Regardless, SONY's install data & software sales Data, as well as reduced production costs are way within forecast estimates outlined by SNE "10 year" Platform cycle. As a shareholder of SNE , I'd watch what happens to MJ Song Library before I'd regurgitate an excuse from a CEO of a Game Publishing company that just emerged from BK, and has *Mishandled* several IP of late as *News* worthy. This was a stretch. CEO comment is two days old, and this Summary of it's *Impact* is poorly researched & written. Not the typical Motley Fool thoroughness I'd come to respect.

  • Report this Comment On July 02, 2009, at 1:30 PM, ahumanwolverine wrote:

    The fact is that game console companies LOOSE money for every console they sell, because it costs more to make it than to sell it. They make a profit when the console owners buy the games for the console. This is why the price cut is coming so slowly, they are already loosing so much from it, dropping it again in hopes to make more on game sales is a big risk.

    This is the risk Sony made when they decided to be the most powerful system on the market, and they are, even the best games for it only begin to tap its full potential. They are also the most expensive. They were hoping that when the industry demanded more from the hardware that Microsoft and Nintendo would have to make a new console just to catch up, and Sony's PS3 would be ready for that demand. However, there is no demand, the games coming out aren't lunging forward in graphics because the audience remains impressed by the current technology.

    Sony will not die off, but the major profit will take some time to come in. Once the demand for better hardware is there the PS3 will be waiting with open arms and then you'll see them meet and perhaps pass the competition.

  • Report this Comment On July 02, 2009, at 1:44 PM, gaucho420 wrote:

    I agree with Mr. Bylund. Let's look back at the history of the Playstation. Why do we all think the PS2 was such a huge success? Take Two and its past exclusivity of GTA games was a primary driver. As soon as that was taken away, one of the main reasons to buy a Playstation was gone and sure enough, the 360 has outsold it, due to GTA and many other games (Devil May Cry was also once a PS exclusive) became non-exclusive, as well as the obviously ridiculous price.

    What is the main driver for the Wii? GAMES, specifically, Nintendo games. So the Wii's got Nintendo's huge heft behind it while the 360s got every hard core gaming company behind hit...what makes Sony's PS3 stand out in any way? Blue Ray? Get real, its a gaming machine first and foremost and then for a very small number of people, its also a movie machine.

    So if you actually beleive that ATVI will pull out, then yes, the Playstation brand is in deep trouble as games need to selll systems. I beleive it would become like the Gamecube of the last generation...still selling, but not close to competiting for the top spot and even then, it would be worse, as the Gamecube had Nintendo's games to prop it up...Sony's own generated games are good, but never great. There's no Sony Zelda in the works and nobody views Sony's offerings as anything that drives console sales. God of War is a good, but not great game, Resistance is the same and Gran Turismo, the true sales driver...has not yet had a true game for this generation.

    As far as Blue-Ray, it is an interminttent step that will never take off fully. Downloading of movies is cheaper, easier & on demand, and the quality difference between regular HD movies and Blue Ray does not warrant paying the price for Blue Ray, for most of the general public. Blue Ray sale are simply not taking off towards wide acceptance, but movies on demand via Netflix, Hulu and other distribution systems are. Blue Ray is too expensive and why do I need a bunch of plastic to watch a movie anyways? The downloading, no hassle, no haggle of movies is far superior to having to go to Best Buy and pay $25 for a movie that cost $12 max at the theatres and is free on HBO just a few months later. Unless you are a hard-core movie watched, HBO-HD & On-demand HD will suffice for the rest of us.

    So the Playstation brand, which is currently in last place in both the handheld and home market, is going to continue to struggle. It now has the highest price, a threat of less games from one of the leading companies, and let's not forget that every single unbiased graphic comparison done by Gamespot.com & IGN.com clearly states that the graphics look better on the 360. So why would a serious gamer buy a PS3 over a 360? Xbox Live also runs circles around Sony's HOME on top of it. As far as the mass market, the PS3 is beyond poorly placed due to price and a lack of mass market games, the Wii has no challengers in this space, which in reality is the only growth driver this generation around. If it wasn't for the Wii, the market would've shrunk, so Sony & MSFT are actually fighting over what is a smaller pie than last generation.

    Let's also not forget that UBISoft complained loudly last year than Sony didn't know what it was doing with the PSP, so this is nothing new. Its just another complaint to an already long list of complaints towards Sony's current consoles. I've predicted the last place finish of the PS3 solely based on price from the get go, I've been 100% correct in all my investments and predictions and now, they're many other factors to back this up besides the ridiculous price. Sony's has made a series of very poor business decision with the PS3 and the corner has turned, it is now too late to change that. There is nothing to drive someone to buy a PS3 besides Blue Ray and that simply isn't a good enough reason to drive sales of what is supposed to be a mainly gaming machine.

    Game Over, Sony.

  • Report this Comment On July 02, 2009, at 1:48 PM, gaucho420 wrote:

    FACT: The Wii has turned a profit since Day 1. Check for yourselves...some companies business plans are simply better than others and Sony's plan is ridiculously flawed.

    Continued losses and a Welsh CEO certainly proves my point.

  • Report this Comment On July 02, 2009, at 5:30 PM, RabbitFly wrote:

    What everyone seems to be missing entirely is why Activision would never ever drop sony.

    Why? well because activision makes the most money on casual periphiral based games.

    Right about now you are all thinking what does that have to do with anything?

    The ps2 comes to mind.

    Well these sorts of games (guitar hero in particular) still sell like crazy on the ps2, if activision would drop sony, they would lease a huge chunk of their overall profits and would quickly drop from their number 1 spot. At least from the console perspective.

    There is also some concern about wether or not Bobby Kotick knows what he is talking about. Considering developers have previously stated that doing ps360 multiplatform games is like getting 1 game free, while developing for the wii is like making a whole new game with little to no return on the investment because of the low attach-rate. This of course doesn't apply directly to activision which currently make almost all their money with guitar hero, which is one of the few third party games to sell well on the wii.

    Another thing I noticed a few of you mentioned was that activision was number one because they purchased blizzard? nothing can be further from the truth.

    The real story was that Vivendi (owner of subsidiaries like sierra, and blizzard) bought out activision, and took the new name activision-blizzard purely because blizzard and activision had become more recognizable names in the industry.

    Activision still exist as a subsidiary of Activision-Blizzard

  • Report this Comment On July 02, 2009, at 5:40 PM, robbo918 wrote:

    @gaucho420:

    First off it is blu-ray doesn't have an "e" in the name, learn to get your facts correct before you throw out an arrogant attempt at being a source of knowledge.

    Secondly you are far far FAR from being completely truthful or accurate when you say the X360 has outsold the PS3. It had a year headstart so obviously it will have outsold it. Yes everyone admits the PS3 is not taking off as wildly as PS1 or PS2 did but the PS3 has sold MORE than X360 did in the same amount of time (keep in mind the X360 has a year head start). The PS3 did that with a higher price point is also important to note.

    It is YOUR opinion only that Sony's own games are "good but not great". Your fanboy goggles are showing. God of War is a great game, as are Uncharted, Killzone 2, Uncharted 2 (according to everything the analysts are saying currently), MGS4, and onwards the list goes. Even Microsofts windbag Aaron Greenburg admired Sony's baseball exclusive. Nothing on Wii or X360 currently has matched Uncharted, MGS4, Killzon2 or the current screens of Uncharted 2 or God of War 3, so again I have to say your opinion that the games are not great is just that...only your opinion.

    Unbiased reviews, are you kidding me? Gamespot is, and has been for years, a supporter of X360. IGN has gone back and forth from camp to camp it is enough to make you dizzy. Very few companies that review games can be considered unbiased in current times sadly. Also, many of the reviews have shown that multiplat games developed first on PS3 tend to be equal or better games than the version on the X360. It is common knowledge the X360 is easier to develop for, it is almost a direct translation from the PC (which is Microsoft's main base). If I will say anything Sony has done really wrong this generation it was to not make it far easier for companies to develop games for the PS3 but they have made major steps in correcting this.

    You list all the problems with PS3 but fail to mention X360 having the single highest failure rate of a home console in history, or the fact that several developers have said they have pulled bigger profit from their PS3 games than X360 or Wii, or that feac that Sony has plenty of mass market games (as does the X360 yet I admit the Wii claims this one hands down), and so on. It is obvious I support Sony but at least I am not so lame as to put an response that was such a blatant skewed interpretation of reality that it stinks of anti-Sony sentiment. I think all three companies have done a good job this genreration.

    Lastly you talk about blu ray versus direct download which industry analysts (not you in your attempt at being the source of all knowledge) have stated that direct download will not take over for some time. There are MAJOR problems with download bandwidths and access all across the US and in many other countries. We all know it is going to happen at some point but not anytime soon. Yes it will be adopted but mass adoption is a long time away.

    Try to not report only little pieces of reality next time and call them the end for Sony. Seriously. Sony has owned the past 2 generations and this generation is far from over.

  • Report this Comment On July 02, 2009, at 6:21 PM, dcbronco wrote:

    Activision is bluffing. They may drop support on some of the smaller titles, but not all of the games. Games like COD and GH sell enough copies to cover any additional expense on the PS3. This is an attempt to get concessions from Sony. A drop in royalty fees to offset the cost of an additional team to do PS3 development.

    But for Sony this is bad timing. They are not financially in a position to give anyone a price break. They have made so many mistakes with the PS3 they might be better off bringing out a new console(w/o Blu-ray, just very large hard drive) in the next couple of years to try to put it behind them. Just as Microsoft needs to do the same to put RRoD behind them.

    Blu-ray is and will always be a niche product. Blu-ray won a war for a very small market. By the time HD video becomes a large market digital downloads will be readily available. Without Blu-ray, Activision wouldn't be making this threat. Without Blu-ray the PS3 would have had a reasonable price from the beginning and would have sold better.

    When it's all said and done, Sony will give Activision their price break and Sony will continue to get all of the Activision games. Activision could threaten to offer Microsoft COD exclusivity(or something similar) and the 360 would sell more as the PS3 sales would drop. The original comments were a warning shot. Sony can't afford for Activision to actually start aiming at them. Again, while I don't think they will drop the PS3 completely, they can hurt Sony.

    @gaucho420

    You're right about Ubisoft complaining about the PSP last year. This isn't new. But one of Ubi's main complaints was UMD. Notice anything missing on the PSP Go? DD is much cheaper than disc. Ubi can still make a nice profit with a smaller install base. $249 doesn't hurt as much and Sony can use some of the extra profit to cover the cost of a PS3 price cut.

  • Report this Comment On July 02, 2009, at 7:10 PM, gaucho420 wrote:

    Gentlemen: I am not fan boy, I'm an investor who happens to plays games and I have been both for years.

    Facts are the PS3 is outsold 99% of the time by the 360, almost every single 3rd party game does better on the 360 than PS3, and websites on the net (which every "fanboy" claims is biased towards their rival platform) has shown that the graphics are better on the 360 than the PS3. So you can choose to or not to believe the sites, but that is what the gaming media reports.

    The PS2 outsells the PS3 more often than the PS3 outsells the 360. Any explanations for this, outside of PRICE, perhaps matters more than any "fanboy" analysis?

    Until someone shows me the PS3 is 1) outselling anybody on a consistent basis regardless of when its gone on sale or for how long, 2) PS3 derived profits by Sony, and 3) any games exclusive to the PS3 that are published by Sony that rival Halo, GTAIV, MarioKart, Wii Fit in sales...the arguments are null & void. Yes, there's Metal Gear (KNM)...anything else?

    A CEO of the #1 videogame company, this side of Nintendo, just threaten to drop the console? What more signs of the PS3 is in trouble do you want? Truly, this does not concern you? You don't think stating that it is easier to program on the 360, per your own post...means its also cheaper and perhaps Mr. Kotick has a very solid point?

    The bottom line is Sony is dead last in sales, no matter how long its been on the market, BluE-Ray (is my analysis any better with an E?!) and its getting worse, not better.

    The 360 does have a huge reliability issue, in fact, its a complete joke...so why is it that the PS3, in spite of this, still can't outsell the 360 consistently? Shouldn't it worry you that even though one console craps out after 3 years (if you're lucky), the other hard-core console still can't outsell it?

    Feel free to buy whatever console you choose for your leisure...however, as an investment since this is the motleyfool.com and not gamespot, I'll go ahead and not recommended SNE anytime soon and if this was a horcerace, I certainly wouldn't bet on the PS3 winning it.

    We haven't even hit up the effects of the Yen rising today, but judging by the surge of Sony bias...I'm sure that's past your level of understanding.

    Good luck!

    --As a note, I do like the move of the PSP to an option of a download only version. If Sony can get that act together (although price once again will doom it), the gross margins there should improve and as a further side note, so long GME!

  • Report this Comment On July 02, 2009, at 7:17 PM, gaucho420 wrote:

    And by the way, I don't think SNE's going under, nor do I beleive the PS3 will cease to be supported by ATVI...it is a complete bluff to drive down the price, which will force MSFT to drive down its price and perhaps, NTDOY will drive down its price as the end result.

    The big winner here are all the software manufacturers.

    So do I beleive ATVI will drop the PS3? Nope.

    Do I beleive SNE will drop the price of the PS3 real soon? Yup.

    Who do I beleive will win the horse race? The Wii and by lapping the others more than once. The 360 should outsell the PS3, mostly due to price and in spite of its reliability factor...the way it has done thus far.

  • Report this Comment On July 02, 2009, at 7:18 PM, gaucho420 wrote:

    And who do I support?

    $$$$$$$$$

    Get that straight.

  • Report this Comment On July 02, 2009, at 8:50 PM, MasonGraphics wrote:

    @ robbo918

    Your post reeks of fanboyism and anyone can tell a Sony Defense Force minion from a mile away.

    Read the title, this is about Sony, not Microsoft.

    People like you sicken me, you make it all about the console of your choice. When your precious system gets attacked, your defense mechanism comes shining through. Throw the word Killzone and Uncharted 2 in mix, and you have yourself a proper defense. You act as the the Xbox has nothing, when in reality, it has more video game sales and attach rates than the PS3. Call of Duty 4 sold 4 MILLION more copies on the Xbox. I hate to break it to you, by the Call of Duty Franchise is owned by, guess who, ACTIVISION.

    Hang on to your little thread of hope that the games that are coming out next year are going to save your precious overpriced "Home Entertainment Package". Have fun in your virtual world of Playstation Home, the biggest failure in social networking.

    While your waiting for your games to come, I'll be playing triple A titles like Fable 2, Mass Effect 2, Left 4 Dead 2, Halo: ODST, Alan Wake, Splinter Cell: Conviction, Gears of War, GTA 4 DLC , Fallout 3 DLC and so on.

    But then again, when they stop making games for the PS3, you could always use it as a luxury space heater.

  • Report this Comment On July 02, 2009, at 11:19 PM, G3TR3AL wrote:

    The author of this article should be fired. What a joke. Ever heard of research Anders?

    PS3 has sold 11 million per year compared to 360's 10 million per year since they launched. An awesome achievement considering it's price point has ALWAYS been higher than 360. In fact the PS3 was outselling 360 hand over fist right up until Sept '08 when the downturn in the economy hit. MS dropped the price of 360 last year not because they are good human beings and wanted to do us gamers a favour, but because they got scared PS3 was catching so fast.

    The current market is price driven and it stands to reason that in times of financial unrest the cheaper consoles will sell more units. Despite the current economic climate the much cheaper 360 has a measly 8 million unit lead over PS3. They should be outselling Sony at least 2 to 1 but they aren't.

    MS are conning the unaware with the cheap arcade unit and grabbing easy sales. No hard drive means no future for them. MS hard drives are so overpriced it's shameful.

    PS3 has a long, bright future ahead. 360 has a short future of multiple disc games that developers don't want to have to pay royalties for having to use an extra disc or 2 or 3. 360 titles will inevitably become inferior versions of PS3 ports with downgraded graphics to fit on as few discs as possible.

    As for the prediction of a 360 exclusive GTA you must be living in the box your 360 came in. Did you miss the recent news about Rockstars new IP Agent? GTA is old news and they know it. Agent is console exclusive not to the 360 despite having sold more units, but to the PS3, the console with a future.

  • Report this Comment On July 02, 2009, at 11:23 PM, robbo918 wrote:

    @MasonGraphics

    Nice you calling me a fanboy then you showing who you favor so strongly. Anyone reading your post can tell who you favor and who you are attacking, pot meet kettle. I never said I didn't support Sony, in fact I did.

    Sony has plenty of AAA titles as well, but you can't accept that, because you are the fanboy that you called me. I admit Sony has made mistakes, as has Microsoft. I don't personally like the way Wii went but as gaucho has pointed out, and anyone with a brain can see, they are winning the console race currently. I also pointed out that Microsoft has done some good things, I will even raise the bar and say they have done some very good things. I admit Microsoft has several AAA exclusives, most I am not interested in but I am envious of Mass Effect I admit.

    So you called me a fanboy but I can point out the positives, something you can't do. Also most the games you listed that you "will be playing" (as in the future because they aren't even out yet) can't be termed AAA until they hit (granted I agree the odds are in the favor of Mass Effect and Splinter Cell, possibly Alan Wake though until it hits who knows). As to your DLC for Fallout, we all get it, you just got it earlier because Microsoft wrote some big checks this generation to make things time exclusive.

    While you play your games (and I truly hope you do enjoy them despite your hatred towards me), I will be playing MGS4, LBP, Killzone 2, iNfamous, Uncharted, Uncharted 2, Gran Turismo 5, that same Fallout 3 DLC, Agent, etc (threw in a few that aren't out yet since you did too). The whole "waiting for games to come" line is really old and a proven fallacy at this point so drop it.

    @gaucho420:

    I misunderstood some of the points you were trying to make originally and I apologize for that, but I still believe Sony will do better than you think before the end of this cycle, they didn't win the last 2 hands down by being stupid. Even if they do lose it (which I don't believe they will, I think they will take 2nd when it is all said and done), they could easily win the next generation (which you never said they couldn't I admit). Their stock will survive is my opinion (and partially my desire I admit lol).

    I still don't think blu ray is doomed either. I do agree with you that digital download is the future, no doubt I completely agree. The key though is the quality and the speeds/bandwidth. The average streaming video is not of the quality of blu ray (or hd-dvd for that matter). It will get there I agree again. The download speeds of the average home as well as what some service providers charge for the amount downloads per day is the problem. The US ranks 10th in the world according to the best report I found in average internet speeds. Granted this too will all change in the long run but I don't think it will happen with the snap of a finger, but it would be nice.

    I think blu ray will still see a viable future and has done well if you compare their adoption to that of dvds in the early years, but I don't think it will ever be as massive as dvds, with that I also agree with you.

    I cannot agree with you that the X360 has better graphics. Yes, on many multi-plat titles in the beginning that was true, but as developers have learned the PS3 architecture that has changed and those same sites you refer to admit that. The PS3 exclusives like Uncharted, MGS4, Uncharted 2, Killzone 2, and a few others have shown the PS3 currently has done better graphically thus far. Alan Wake will be interesting for X360, I am excited to see how it turns out for them, might change the bar a little, who knows?

    The other point is that you claim blu ray sales are worse, which they aren't. As blu ray players drop in price and as the blu rays themselves also drop the adoption rate will continue to grow. NPD even shows a growth of 72 percent according to this article (and there are several others I won't post). http://news.digitaltrends.com/news-article/19899/blu-ray-pla...

    Well said on most of your post gaucho, again, sorry for some understanding. As to masongraphics, I think you are as much a fanboy as you think I am. I admit the positives of what is obviously your system of choice but I can also easily admit the positives of mine. The key is we both won. I am not the psycho fanboy you think because <gasp> I don't want any of the three to fail, competition is good. I sure don't want the Wii to kill off anyone because the graphics on that thing bore me and the controller irritates me, but to each their own.

  • Report this Comment On July 03, 2009, at 6:08 AM, Mikkel4600 wrote:

    I also agree with Cal. Now, I dont know much about the sale stats for both consoles, but I know that titles like "Gran Turismo 5" and "God Of War III" will sell a lot. The Gran turismo 5 : Prologue game, which only has around 70 cars, and 5 tracks, has almost sold around 4 million. And this is only for a demo. I think that Gran Turismo 5 will hit the Call of Duty level of sales, as Gran Turismo 5 also comes to PSP. Not to mention God of War III, with insanely many fans. God of War II was (according to me) 1 of the most known games for ps2. Now, with the stunning graphics and gameplay, I can only see big sales from that title too! The ps3 will last as it was planned to. The team behind "GTA" series, is now working on an EXCLUSIVE for ps3 called "Agent", so another GTA title for both consoles are probably not gonna come soon.

    Thanks

    //Mikkel

  • Report this Comment On July 03, 2009, at 11:58 AM, CreatedUser wrote:

    Sony does have a dilema on it's hands. They came off the previous generation in a position of dominance, and unfortunately also arrogance. The PS3 should have continued to dominate on momentum alone, but didn't. Instead, we have an over engineered, costly item, that while attempting to push the Blu-Ray platform caused the Playstation platform to suffer.

    Normally Sony counts on the Playstation brand to generate a lot of revenue, both during good and bad times. So when the ecomony isn't doing well, and certain divisions in Sony have suffered, so is the Playstation brand, you have to believe things aren't so rosey at Sony right now.

    Sony is or was taking a loss of each PS3 made. They were hoping to recover the costs through volume and through software. Multi platform titles which appear on the PS3 tend to sell half as much. And the PS3 while it has sold a lot of hardware to date, isn't selling en mass due to pricing, and as of late has been in decline.

    Changing the pricing on the PS3 would go a long way to improving the PS3's fortunes, however it would affect Sony's bottom line as a company as a whole. It's a catch 22.

    So to date, Sony has been bundling, while maintaining the same pricing levels. It's worked with mixed results. It enticed some, but not all of the former PS2 owners. I think the bulk of former PS2 owners are waiting on a price reduction of the PS3.

    What I see with Activision is a message. They're saying they'll cut back or cease new titles if Sony doesn't act to sell more consoles. And I believe Activision is making good business sense. Why continue to receive a low return on investment? Sony needs to act.

  • Report this Comment On July 04, 2009, at 12:02 AM, ElRamero wrote:

    Ok, so here's the warped logic of Mr Kotick: "We might stop developing for them because they don't have enough consoles out there". So, what he means is that 23-24 million consoles are not enough, BUT back in Oct 07 they released Call of Duty 4: Modern Warfare, when the 360 had an installed base of... want to take a guess?, that's right, sub-25 million consoles.

    So right now, with the PS3 with exactly the same number of consoles out there as the 360 has had in the same time reference, Sony has to get crap from Activision?.

    To me it's either 1) Kotick is an amateur CEO's giving uninformed opinions/threats, or worse yet, 2) He really thinks he has the upper hand against Sony and thinks he can easily disregard 20+ million potential customers without a financial fallout (if I were their stockholder I would grill him in the next investors meeting).

    All of their popular products are readily (and easily) replaceable (too many FPS' and Rock Band).

  • Report this Comment On July 07, 2009, at 4:18 AM, GenChaos wrote:

    I doubt they drop PS3 support. The Wii doesn't tend to do very well with Hardcore games. The PS3 with it's lesser numbers tends to move more games of those types than Nintendo's machine which is telling. The Wii sales are dominated by Nintendo games and party games so if they want to move hardcore type IPs they can't really count on that console. At worst they'll stop developing exclusive IPs for the PS3 which to an extent is already the case.

    Anyway I keep reading that the PS3 slim which is due later this year will feature a cheaper price point (in part thanks to cheaper production costs). Sony's really f'ed up with the PS3 but it's not too late to turn things around (the machine really is a work of art if you own one). I'm guessing they're going to coincide the price drop along with the holiday season when it'll make the biggest impact on sales.

  • Report this Comment On July 09, 2009, at 1:52 PM, Big50Shooter wrote:

    Activision is full of hot air...

    Secondly, I think it was a big mistake for Sony to drop the reverse compatability from the PS3...

    I have one of the original PS2 game stations (big sucker) and it still works great! I also have a crap-load of PS1 & PS2 games that my kids and I still play on that console... Last Christmas, I went to buy the kids a new PS3 in the hopes that the boat load of PS1&2 games we have would still be compatible and I found out that they weren't anymore! Since our PS2 still works fine and we are still entertained by it, I guess we just continue on playing it until it breaks and then go and get a $100 new PS2 console again...

    I also agree with others that Blue Ray capability should be nixed from PS3 (especially if it helps to reduce costs.. Bring back reverse compat.!)... Personally Blue Ray is a lost cause and that technology priced itself out of contention considering the other technology (HD & movie downloads) which became available at the same time which do everything just as well without the expenditure on and overly-priced DVD player, better resolution or not...

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