Games Not Profit

Tony @ Gamingvice.net writes:

"Bobby Kotick, head of Activision has been running his mouth about the PS3 offering a lower return on investment than the 360 or Wii. He says that the attach rate to the PS3 is likely to suffer if the price is not dropped. If this is the case, come 2010/11 they may stop supporting the PS3 and possibly even the PSP.

To try and illustrate his point, let's use Call of Duty 4. Let us say that on 360 each game sold generates 50% revenue for Activision and on PS3 25%. To break even on 360 Activision must sell 1m copies and on PS3 2m."

[KingKionic]

Pretty interesting article . what did the quote mean

"only possible on ps3"?

Then theres someone playing cod 4 : modern ware.

[really duh]

I was trying to figure out the video and the statement as well.

[KingKionic]

At least you notice that. I was kind thinking:

huh?

lol

[ugly1]

Maybe it's a representation of the article? eh

[gamesR4fun]

u guys check out the vid omg hows that possible? looks to real for photoshop...

+bubbles to the guy who tells us how lol

[Marceles]

whoever was driving must've had Miss Daisy in the car

[Crazyglues]

the car glitch, he was saying this glitch is only possible on the PS3 version...

where someone is driving a car in the video...

As far as the story, this guy did a very good job of trying to breakdown what the hell the CEO of Activision meant.

What would have been nice is if the dam CEO just gave us the dam numbers so we would be able to see if what he was saying had any truth to it.

[really duh]

Why?

[KingKionic]

lol?

a glitch?

ahaahah....thats funny.

[really duh]

OK I'll be clear relation please...

[Tarasque]

"Bobby Kotick, head of Activision has been running his mouth". Soon as i read that i quit reading hate fanboy whiney article's.

[JL]

Is it just me or does the Activision guy argument seem weak? Haven't read this article nor am I going to, but I just thought of something and wanted to add my two cents. For the most part, how does the price of a system really effect the attach rate for that system? I mean I've already spent my $500 so it doesn't matter how cheap the PS3 gets, I'm still going to end up buying the same amount of games (since attach rate is amount of games sold per console). It all likelihood wouldn't the most determining factor of attach rate be the price of games rather than price of console? And wouldn't it benefit attach rate if Activision lowered they're games by like $10 or so, moreso, than it would help if Sony dropped $50 off the PS3?

Maybe my logic is flawed here (so feel free to disagree as long as you can give me a logical and intelligible counterargument), but I just see game cost being a much more important factor in attach rate rather than console cost.

[Chuk_Chuk]

wonder if they realise MS have higher royalty fees than sony.

[pilotj25]

A lot of my friends bought the PS3 for movies as it was a cheap and upgradeable blu-ray player and they really only own 1 or 2 games. I think this is what activision believes is happening with the PS3 (not necessarily 1-2 games but no where near the attach rate of 10 for the 360.)

Just averaging here guys so no raging fan boy hard ons if I don't get the numbers exact and I rounded some ratios...I used World Wide VGchartz for figures. Even though the PS3 has 22 million units sold and the 360 has say 30 million units sold the game sales are not in a 2:3 ratio as the consoles that were bought. When COD 4 sells 7.4 million of the 360 and 4.3 million on the PS3 they likely feel that the PS3 should have sold closer to 500k more to keep on par. That's a big chunk of money. If you look at most releases the PS3 versions sell below 66% of the 360 versions. With bottom line thinking that cuts into companies profits.

So they look to other reasons, maybe people in America only bought it for a Blu ray player, or in europe only women bought it because it looked sexy with the black sleek design, or maybe they included a fleshlight with it in Japan. OR maybe only 40-55 year old men could afford one because the price was so ridiculous when it came out you had to sell your first born to get one and keep food on the table.

The point is likely the demographic that buys games and uses a console as a console cannot afford an extra 100-200 to play the same video game on the PS3. You look at most people that play video games it's 13-30, and me being 25, I can't see myself spending an extra 200 (at the time) on a PS3 to play the same games, I really couldn't afford it and that's 4 games that I could have bought. I don't care what extras it has, I want it to play games. I can't afford spending the extra $10 a movie for blu-ray with marginal quality improvements so that doesn't make it an incentive for me to buy it. The exclusives aren't really great on either. And the PS3 usually craps the bed with regards to sales except for MGS4.

Likely all of the parents buying kids their consoles, people on more of a budget, less concerned with bells and whistles, or people that really just want to play games will buy a 360 and buy the games. For the PS3 to continue to be competitive they need to sell hardware to people that buy games, not movies, games. And it's not at $399 CDN.

I can do more gaming on the 360 with the better graphics.

[JL]

Wow, I'm going to have to bubble you for actually bringing an intelligible counterargument instead of some fanboy "You're wrong, Sony sucks!" comment like others might have.

Now, that is in interesting take what you wrote there, and I guess on some levels they were valid points, however, for me, it doesn't truly hold water when broken down. I'll give it to you that yes, some PS3s were bought just as blu-ray players. However, now that you can get a stand alone for much cheaper, I seriously doubt that that happens at all anymore. It's just too expensive to buy for only movies. Going on those reasons (that people buying it just for movies lowers attach rate), wouldn't it make sense that if lowered the price and made it more along the lines of standalone players, then people would once again start buying it just as a blu-ray player, and that would further hurt the attach rate? That would seem the more likely case for me. I just don't see anybody in their right mind buying PS3 for just movies anymore when you can get a player for half the price.

As for, only the older crowd can afford to game with the system. I don't see that much effecting the attach rate either. I mean a price drop isn't going to effect how many games I buy as I already own the system. And I don't think that extra 200 initial charge really has all that much of an impact on game sales, as it's only an initial charge, plus if you're able to afford the PS3, chances are you're not short enough on money that you can't afford games afterwards either. I mean maybe that's the reason, but, for mine, I just don't see it. I see the console price effecting the amount of consoles bought, not so much the attach rate, especially not in the long run.

All in all, really for me, it seems that game price (more so than console price) is the reason attach rates aren't higher. I mean I own like 20 games for my PS3 right now, but I know for sure it would definitely be more if games weren't an outrageous $60 a pop for each game.

I think in the end, the real reason for higher attach rate on 360 is because I'd say the average xbox owner is much younger than the average on PS3. I'd venture to bet that the xbox age is something more like 18, while the ps3 is more like mid-20s. And yes, this is partly due to price, but I think even more so would be the fact that xbox dominates the US, and the US has these spoiled American kids who probably make up half the xbox customer base, who are xbox gamers because xbox is the one more pushed down throats over here and really holds the spotlight more. And these kids really have no responsibility and are free to spend all the money they have on gaming as opposed to dividing it between gaming and bills, etc. So I guess in a sense price does affect that cause maybe more of these lil i-spend-all-my-money-on-games kids could afford a ps3 and start blowing that money on ps3 games instead, but I think it's sort of more about who the average demographic is for each system.

These are just my thoughts though, and maybe I'm wrong. Though as I do get towards the end of that argument there I do realize how a BIG price drop could eventually bring in more KIDS and thus bring up attach rate (though I still think not have near as much of an impact as cheaper games rather than cheaper consoles). But honestly, if that means having to get rid of the mature crowd that I'm accustomed to, I'll pass really. Cause I'm not missing out on anything. Activision has nothing for me. In the end, though I still think it's kids that push these attach rates up and I think xbox is the place for said kids because that's the stigma of them and their image. Xbox has always been this cool toy that you get mom to run out and buy and Playstation has always been the high tech piece of technology from one of (if not THE)leading name in electronics, just the way I see it.

Anyways, thanks for the intelligent reply and counterargument. Though could have went without the fanboyish "...with better graphics" at the end. All the same though, bubbles for you.

[GrandTheftZamboni]

There are twice as many 360s in North America as PS3s. If it's true that 360 owners buy more software, you would think that 360 games would sell more than twice as much. Well, it's actually less than that. Either PS3 owners buy more games, or bunch of 360s are actually RROD replacements, or combination of those. Worldwide ratio is even more reflective of that statement, but it's easier to see in NA example. That is according to VGChartz.

[ugly1]

All hypothetical. We don't know how much it costs to develop on either the PS3 or 360. The PS3 isn't as difficult nor as expensive as it was when it first launched. Cost have obviously come down since then, and the COD4 engine is already optimized for both the PS3 and 360 equally.

Realistically, selling 4- 5 million of any game is profitable business. This is more a about a company that wants more money and wants to exploit their ips, being the top dog, (by releasing three Guitar Heros in one year) any and every way possible. Of course they want more PS3s sold, rather than drop it completely.

There is no PS2 this generation.

Koticks' comments are more long term, rather than short term. As, he seemingly expects the PS3 to continue to sell at $399.99 for the next few years, disappointed at the lack of a price cut so far, after crying for one all year.

To any company, though, it's all about profit. These executives are vampires out to drain their ips dry and to sell you their products.

[TapiocaMilkTea]

Something's not right about the article. It's comparing the cost for developing an Xbox version to a PS3 version as if they're two different games. When you make an Xbox version, you already spend money on most of the development that is transferable to the PS3 at little to no cost, like the gameplay, story, art etc. The marketing is transferable also, you just need to add an extra PS3 logo to the ad.
It doesn't seem like it cost that much just for porting the game to a PS3 version, the extra PS3 sales should be more than enough to make a profit out of it.

[DragonWarrior_4]

That vid is freaking epic. I ccant believe I just witnessed that.

[gamesR4fun]

looks like were the only ones who watched it lol

still mindblowing gonna show this to my friend the cod addict XD

[The Great Melon]

That was cool, never seen that happen.

[Knightrid808]

Wow, that was pretty funny lol.

[El_Colombiano]

I think I might have to buy COD4 again if you can drive online!

[themyk]

ok now i have to watch the video. hold on

[themyk]

ok watched it. WTF

[-x.Red.x-]

the only thing interesting...

[error 74]

i dont care
ill just download the game for free
on the 360

[-x.Red.x-]

Once the 360 is 49.99
I'll do this.

[user3915800]

Activision and almost all other developer its right, sony thought of themselves and no one else which is why the PS3 its pure crap. A nightmare to develop for, expensive as heck as I stated a long time ago it will take twice the resources to get it to the 360 level and then its still crap. Those are facts people get used to it. Obsolete hardware deserves obsolete software or nothing at all (good call for activision and valve on this matter). Sony have brought many developers to bankruptcy, due to some games been descent and jet the so call PS3 fanbase not buying it. Oh well, Valve said it best producing quality games for the PS3 its nearly impossible due to the high risk involve.

[free2game365]

this article fails to actually factor in PC sales, which were probably higher than the PS3 version for COD4

[swiftshot93]

best glitch ever.

[JonnyBigBoss]

Article fails, video owns.

[Godmars290]

An article called "Games Not Profit" goes on to justify the limiting of access to game in terms of profit?

[ULTIMATE_REVENGE]

HOW is it Sony's fault if Activision games are not selling well on the Playstation 3? Sony are not the developers and they are not to blame.

Marketing has been an issue but prices are identical in the market for both consoles. Sony already have numerous first party developers and Activision will only be stupid to loose wider sales potential.

Bobby must be having his monthly periods

[villevalorox]

are we sure that video is not just a pc mod? i'm sure it woudl be possible to mod that and also possible to change the buttons to ps.
???? never once saw a ps3. it could have been a recorded pc mod and played on a dvd player.

[DJ]

But hey, glitches happen. It's up to the developers to nail them and fix 'em.

[ULTIMATE_REVENGE]

That video was SO AWESOME

cars?? is that for real?!

[Kushan]

What a useless article. Anyone can come up with arbitrary numbers like that. It hasn't really told us anything and completely failed to bring home the point it was trying to make: Activision isn't happy, for one reason or another.

[Amplitude]

"Data from vgchartz."

lmfao

[DJ]

Microsoft cites VGChartz for European sales all the time. =P

[keysy420]

if i were activision i would start to do things that would promote the game on ps3. because if i want to sell on both systems equally i then have to market both games equally.
This makes a problem with the industry and not the system. Activisions has a problem with letting M$ pay for exclusive content. exclusive content will supposedly spur people to buy the game on 360 right.
So then his arguement doesnt really make sense.

If you want people to buy the game on the ps3 then make the game the same on ps3 as it is on 360.

exclusive content is kinda dumb for 3rd parties to agree to cause it really hurts themselves.
Also how dumb is M$,
is their anyone of you out their that really believe that the ps3 version wont get some map pack soon.

[Rob0g0rilla]

All it requires is a lag switch to get inside of it.

[You Already Know]

that's crazy...they should make that possible with the online play....not just via glitch..

[xg-ei8ht]

There is a PS2 this gen, it's called the wii. Except most people buy nintendo games.

Possibly same hardware as well:)

I dont see how selling 4.4million copies isnt giving you a decent return.

Games new are £40 in uk. RIPOFF, nothing new for us brits.

[altimako02]

those numbers are if it cost the same to develop for each system . so if it cost 10 - 25% more to develop for the ps3 then you could see why he said that . business is business none of you could tell me that you want to work for little or nothing , when you could be making alot of money

[Arnon]

Exactly. You could sell as many as you want, but if it's production costs are extremely high for that platform, then it doesn't matter.

Also, this article fails.

[D3acon]

the ps3 is more difficult to develop for, sony has created free tools so developers don't have to be expert first party developers to know how to get the game to run on the 360 and use the same code for the ps3.

I really don't see why it would be wise for them to drop the ps3 and focus on xbox, it seems that is just missing revenue.

Of course I still feel jilted about how they dropped cod4 on the ps3, they released one map pack, no trophy support and then another cod comes out a year later. That makes me have a wait and see attitude and not just go out and buy the game.

[really duh]

"I don't believe...
the ps3 is more difficult to develop for, sony has created free tools so developers don't have to be expert first party developers to know how to get the game to run on the 360 and use the same code for the ps3."

LMAO You should become a developer and take their places.

[Defectiv3_Detectiv3]

His whole equation for profits in that article is flawed to begin with. If it really costed that much money to program a game to work on the PS3, then there would be a lot less multiplatform games, considering most of them would have to sell into the millions, which they don't normally do. Plus, think of all the money Activision makes of DLC for RockBand and COD.

I don't feel sorry for the devs. who complain about programming for the PS3. They can get out of the industry if they don't like it, because what the PS did for companies like Activision was lay the foundation for modern day console gaming as we know it. It is amazing the wealth of titles Sony has introduced and the growth they have made. So what if this console is getting off to a slow start, if it is supposed to last as long as they say, then it will easly be as successful as the PS2.

Its alright for dev. costs to go up, that is also a sign of growth. Maybe if Activision didn't release a sequel to RockBand and CoD every year it would give the games time to sell and people wouldn't get burnt out. Maybe if they gave us a few more original IP's, we'd have an excuse to buy their games. Alot of people just rent or wait for the price to come down for sequels, because they can play the old one.

[snp]

I'm sure it is more difficult and probably more costly to develop for the PS3 (though less so as more experience and tools become available), but i doubt very much it's to the extent that the excited anti-Sony folk would have one believe.

Certainly not likely two-to-one (50% versus 25% etc), especially not on multiplatformers where 90% of the assets (and costs) are shared across/independent of the platform,. An extra programmer or two - at most - here and there over a year or so to iron out the engine on the PS3 version isn't the difference between 25% and 50% on profits, i wouldn't have thought.

That's the trouble with these articles: they take random, rather extravagant, guesses at numbers and then extrapolate all sorts of nonsense from there.

[A LIVING LEGEND]

snp,your comment is probably closer to the truth than many would care to admit or even consider.=)

[TwistedMetal]

start useing that extra blueray space and cell power to the max. You can add a ton of features and such just from the extra space alone and at no extra development time and research. Instead you guys rather keep stuff out of a game so you can sell it as dlc later.

[iANONYMOUS]

Bobby said "It's expensive to develop for PS3"
You want to add extra content and fill Blue-ray?
That's more stupid, not stupid meaning the game will sux,
It's stupid in a way bobby thinks,
More content = more time/More money/more work.

Why should they wait and develop 4-5 years and wont get as much profits as they can when develop a game only for 1-2 years.

DLC is Downloadable content,
They create that content after the game is finish.

[Percy]

Anyone can make up numbers this writer has no idea what he is talking about. I can say that every time activision sells a ps3 game they make $500 and every time they sell a 360 game they lose it. By that logic they should stop selling 360 games. My numbers have just as much proof as his.

[Master-Baiter]

This "writer" is just ILLUSTRATING.
He says this twice.
The way I see it, Bobby Kotick is saying it's more expensive to make PS3 games.
How much more expensive? No one knows.
So the writer says twice as much.
Then Bobby Kotick talks about royalties to Sony, he doesn't say if it's different to Microsoft.
So the Writer says twice as much.

The article gives Bobby Kotick the benefit of the doubt.
Yeah it's made up, but it gives more context to Bobby Kotick's words.

[You Already Know]

exactly -baiter...

in a case like this, all you can do is use an educated guess-timate when formulating a method of what Kotick wants to see "sales-wise"...

and as I said on the site where the article is at...he didn't say that so much to get more CoD sales, but rather he is almost threatening to take that game away if Sony doesn't give them a larger install base to work with to sell the rest of the games that they have to offer..