http://www.videogamer.com/news/activision_we_might_have_to_stop_suppo... Empty threat, or serious?

http://www.videogamer.com/news/activision_we_might_have_to_stop_suppo... Empty threat, or serious? Could be serious. I'm sort of surprsied it took this long.  With the PS3's high price and low hardware and software sales, how long could 3rd party developers justify working on PS3 _title_s - even if they were part of a multiplatform launch?

I'm sort of surprsied it took this long.  With the PS3's high price and low hardware and software sales, how long could 3rd party developers justify working on PS3 _title_s - even if they were part of a multiplatform launch? The Times article they _link_ to goes into more detail: http://business.timesonline.co.uk/tol/business/industry_sectors/media... It is not a very subtle hint, although Mr Kotick says his company paid $500 million to Sony in royalties and other goods last year. So I went over their annual report for last year. Guess how much revenue they took in from PS3 games? $241 million. Source: http://files.shareholder.com/downloads/ACTI/666255578x0x295665/7cc591... - Jordan

http://www.videogamer.com/news/activision_we_might_have_to_stop_suppo... Empty threat, or serious? Could be serious. I'm sort of surprsied it took this long.  With the PS3's high price and low hardware and software sales, how long could 3rd party developers justify working on PS3 _title_s - even if they were part of a multiplatform launch? http://www.gamestooge.com/2009/06/19/sonys-non-response-to-activision/ And Jordan wrote in comments in another article: Every publicly held company is required to file both quarterly and annual reports. You can find the latest for Activision here: http://files.shareholder.com/downloads/ACTI/666255578×0x295665/7cc591b7-430b-42b6-a4a5-e37b8c467161/ACTI08AR.pdf and here: http://investor.activision.com/secfiling.cfm?filingID=1104659-08-8944 A couple of things worth noting: Of that revenue (page 31 of the annual report): 407 million came from the Wii. 361 million came from the Xbox 360. 284 million came from the Playstation TWO. 241 million came from the Playstation THREE. 1 million came from the original Xbox So net console revenue is almost 1.3 billion dollars, of that the PS3 represents just 18.5%. Out of the total 5 billion in Activision revenue for 2008 the PS3 accounts for 4.82%. So, you might go Wow, $241 million, that's a lot. And if you add it to the PS2 revenue you get $525 million. But we don't know what it costs Activision to reap this revenue from Sony products, the costs aren't broken down by console. We do have this quote though: http://www.thetechlounge.com/news/13754/Activision-Bored-with-the-PS3/ Mr Kotick says his company paid $500 million to Sony in royalties and other goods last year. So if that's true they paid Sony $500 million and took in $525 million in revenue. That's $25 million in profit, but doesn't take into account development costs. A single high-profile game can cost that more than that to develop (Grand Theft Auto IV for example is rumored to have cost $100 million.) It's highly likely that Activision would actually make MORE money by dumping Sony than keeping them.

I'm sort of surprsied it took this long. With the PS3's high price and low hardware and software sales, how long could 3rd party developers justify working on PS3 _title_s - even if they were part of a multiplatform launch? The Times article they _link_ to goes into more detail: http://business.timesonline.co.uk/tol/business/industry_sectors/media... It is not a very subtle hint, although Mr Kotick says his company paid $500 million to Sony in royalties and other goods last year. So I went over their annual report for last year. Guess how much revenue they took in from PS3 games? $241 million. Source: http://files.shareholder.com/downloads/ACTI/666255578x0x295665/7cc591... - Jordan The fact that even when Sony got $500m from AB, they still lost almost $600m in their game division last year. Even if they drop their console prices and the fact that AB accounts for a decent chunk of software sales, Sony will have to cut back what they charge to AB unless they can get their install sizably larger quick, just because it's so expensive for AB to develop the games for the PS3.

http://www.videogamer.com/news/activision_we_might_have_to_stop_suppo... Empty threat, or serious? Could be serious. I'm sort of surprsied it took this long.  With the PS3's high price and low hardware and software sales, how long could 3rd party developers justify working on PS3 _title_s - even if they were part of a multiplatform launch? http://www.gamestooge.com/2009/06/19/sonys-non-response-to-activision/ And Jordan wrote in comments in another article: Every publicly held company is required to file both quarterly and annual reports. You can find the latest for Activision here: http://files.shareholder.com/downloads/ACTI/666255578×0x295665/7cc591b7-430b-42b6-a4a5-e37b8c467161/ACTI08AR.pdf and here: http://investor.activision.com/secfiling.cfm?filingID=1104659-08-8944 A couple of things worth noting: Of that revenue (page 31 of the annual report): 407 million came from the Wii. 361 million came from the Xbox 360. 284 million came from the Playstation TWO. 241 million came from the Playstation THREE. 1 million came from the original Xbox So net console revenue is almost 1.3 billion dollars, of that the PS3 represents just 18.5%. Out of the total 5 billion in Activision revenue for 2008 the PS3 accounts for 4.82%. So, you might go Wow, $241 million, that's a lot. And if you add it to the PS2 revenue you get $525 million. But we don't know what it costs Activision to reap this revenue from Sony products, the costs aren't broken down by console. We do have this quote though: http://www.thetechlounge.com/news/13754/Activision-Bored-with-the-PS3/ Mr Kotick says his company paid $500 million to Sony in royalties and other goods last year. So if that's true they paid Sony $500 million and took in $525 million in revenue. That's $25 million in profit, but doesn't take into account development costs. A single high-profile game can cost that more than that to develop (Grand Theft Auto IV for example is rumored to have cost $100 million.) It's highly likely that Activision would actually make MORE money by dumping Sony than keeping them. I bought 1K shares of Activision back in July of 2007 for $8.62/share. I thought with COD Modern Warfare going to be a huge hit that it would be a good payoff and it was. Then Vivendi got Activision in their grips and the stock jumped to almost $20/share, I was doing pretty good. I held onto it knowing the next iteration of WoW would be coming out and the fact that the next Modern Warfare would be coming soon as well. By January of this year, I sold it off at $9.12/share and barely made anything after fees. Now it is back up to the $12-13 range, but I couldn't hold on knowing that it could cause a loss.