The chief executive of Sony Computer Entertainment America, Jack Tretton, said in a interview that it was inappropriate for Activision’s Robert Kotick to call for game console developers Microsoft and Sony to slash the pricing of Xbox 360 and PlayStation 3 game consoles to $199 in two years time. In addition, Mr. Tretton offered Activision Blizzard (the game publisher to be formed by Activision and Vivendi) to create its own game system.
Back in late November the head of Activision said that in order to better compete against Nintendo Wii, the game console that has merely outsold Microsoft Xbox 360 game console and has been consistently outselling Sony’s PlayStation 3, Microsoft Corp. and Sony Computer Entertainment Inc. would need to cut their pricing to $199 in the following 24 months.
Currently Microsoft Xbox 360 is available for $279, $349 or $449 depending on the version; Nintendo sells its Wii, which is the most successful new-generation game console, in the U.S. for $249; whereas different models of Sony’s PlayStation 3 cost end-users $399 or $499. It is believed that both Microsoft and Sony lose certain amounts of money on every piece of hardware, but while for Microsoft the loss is either relatively minor or there is no loss at all, for Sony the loss on every console is significant enough to affect profitability of the whole videogame group.
“I think from an unrealistic standpoint, I’m never surprised by that, because a software manufacturer may not be concerned whether a hardware manufacturer is successful or whether they’re profitable. But I think they should be, because without the hardware manufacturer, the software manufacturer has nothing to publish on. But, you know, I’m surprised by it, because I would never venture to suggest what software publishers should price their software at. So I don’t think it’s appropriate for them to suggest what hardware should be priced at,” said Jack Tretton, the chief executive of SCEA, in an interview with The Mercury News news-paper.
Many analysts and observers noted that slow progress of Sony PlayStation 3 may cause game developers to reconsider their priorities and shift efforts to Nintendo Wii, the fastest and best selling game console on the market, and Microsoft Xbox 360, which has been gaining strength in the recent 24 months.
Responding to the question whether Mr. Kotick wanted to attract attention of Microsoft and SCEI executives to massive success of Nintendo Wii, Mr. Tretton suggested that the chief executive of Activision Blizzard should develop a game console platform.
“I don’t know, maybe he should design a platform,” Mr. Tretton said.
Game publishers are interested in affordable game consoles, as more people buy such hardware and then start to get new video games as well. On the other hand, technically-advanced and rather expensive game machines, such as PlayStation 3 and Xbox 360 are acquired by so-called hardcore gamers, who buy massive amounts of software too.
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