Despite a growing user base for the PlayStation 3 and PSP, Sony recently reported a total net loss of $1.03 billion , its first since 1995. The news came on top of previously announced job cuts and vast restructuring, while its flagship console, the PS3, continues to lag significantly behind both the Xbox 360 and the Wii in worldwide unit sales.
Now it looks like things might be taking an even greater turn for the worse for Sony. Speaking to The Times of London, Activision Blizzard CEO Robert Kotick threatened to pull support for both the PS3 and the PSP as early as 2010, saying that the return on creating games for the platforms isn't as good as on competing systems.
"I'm getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they don't make it easy for me to support the platform," he said. "It's expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation."
"They have to cut the price, because if they don't, the attach rates are likely to slow," he continued. "If we are being realistic, we might have to stop supporting Sony." When asked about a time frame he said, "When we look at 2010 and 2011, we might want to consider if we support the console--and the PSP."
Kotick's recent statements aren't the first time he's called for a price cut to the current generation of consoles. In November 2007, he told a Reuters Media Summit that all three consoles need to be priced under $200 by 2009 if they want to continue pursuing mass-market adoption.
Activision Blizzard is weathering the current global economic crisis with aplomb, having reported a $189 million profit on revenues of $981 million during its January-March quarter. The publisher's rhythm franchise Guitar Hero also continues to perform, with Kotick describing the series "as big as Titanic with better margins." The franchise is soon to be bolstered by the upcoming release of turntable-equipped rhythm game DJ Hero, which is due to be released on the Xbox 360, PS3, PlayStation 2, and Wii later this year.
[UPDATE] Sony didn't stray from the company line in issuing a response to Kotick's statements. "PlayStation has tremendous momentum coming out of E3, and we are seeing positive growth with more than 350 titles slated to hit across all our platforms, including many anticipated games from our publishing partners," the publisher said in a statement. "We enjoy healthy business relationships with and greatly value our publishing partners and are working closely with them to deliver the best entertainment experience."