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Activision CEO: Economy pressuring console price drop

Bobby Kotick says the US financial situation may prompt Sony, Microsoft, and Nintendo to drop the price of their products.

Activision CEO Bobby Kotick is all for lowering the price of consoles. Last year, the soon-to-be Activision Blizzard chief said that all three major consoles--the Xbox 360, PlayStation 3, and Wii--needed to be in the sub-$199 price range by 2009 if the gaming industry had any hope of pursuing mass-market adoption.

While console makers have thus far shown no willingness to comply with Kotick's advice--and Nintendo going so far as to say the Wii and DS's prices will remain fixed through 2008--the powerful exec now believes the US's limp economy may force hardware maker's hands.

"With the rising costs of fuel and food and housing, it is more difficult to go out and buy a $399 console, and I think it's going to put pressure on the console manufacturers to reduce their prices," Kotick told international news service Reuters yesterday. In the same conversation, Kotick expressed concern over EA's aggressive takeover attempt of rival Take-Two, saying to Reuters, "When you think about one company in control of the sports category, with no competition from anybody else, that could be a challenge."

Global economics have already played a role in console makers tinkering with the prices of their wares. Earlier this week, Sony said that with the Canadian dollar having significantly strengthened against the US dollar, it would be recalibrating PlayStation Network prices north of the border to bring them more in line with those in the US.

82 Comments

  • gruntyboy

    Posted May 25, 2008 2:41 am GMT

    something is telling me I'll never see a $300 doller ps3 thats what about £150 lmao no chance would be VERY nice though would make me buy 1 good games or no good games lol

  • da1writer

    Posted May 7, 2008 1:30 pm GMT

    N0MATTER... LOL, hope I didn't offend you with my comment (or anyone else by that matter). I know what it was like when I was a teenager, I only had part time jobs and had to save for a long time to get a PS2. I am a bit sorry if I came across rash, I'll take back a few of my words and apologize. HYDROLIX put my perspective in the right place I got me thinking about what I said. Maybe price drops would be nice, not a huge drop but my a little one every six months. I don't think the 80gb PS3 should be $300 just yet but maybe $400 for those who want extra gravy. I do believe that the 40gb PS3's should be dropped to $300 soon so that more people do own the PS3. As CTG867 said, maybe the 360 will go down in price but isn't the arcade one cheap enough? I am firmly going to stand by what I did say in my original post about the Wii, it doesn't need a price drop, nor does the PSP or DS. I believe that are at a good price range so that anyone can grab one in case someone gets bored of games on a certain platform ! Sorry about my original post but certain sudden *cough* PM sent to me made me realize a few things. The economy isn't getting better when it comes to gas prices going up and money issues, so I hope this post apology and new post does a better job than my last.

  • ctg867

    Posted May 6, 2008 3:17 pm GMT

    I figure that the PS3 will hit $300 by the end of the year, but I doubt the Wii will drop, and if the 360 drops at all, it'll be dropping each SKU by $50, given that Microsoft is very cheap with console prices.

  • Hydrolix

    Posted May 6, 2008 8:47 am GMT

    @da1writer You make a good point...the article's point, though, is not what people will do to get one, but trying to make the product MORE mainstream and MORE available to everyone. That means the casual gamer...which, it sounds like you are not...and the person who earns minimum wage...which, it also sounds like you are not.

    Econ math...sell 10 consoles at 400 good. Sell 20 at 300...better! More money, more install base, more game sales.

  • n0matter

    Posted May 6, 2008 6:04 am GMT

    Interesting comments, da1writer. Now if only ethe entire world was populated with teenagers with little responsibility and flawed priorities capable of squandering that extra $400 for a console. Perhaps your flawless rationale can offer up a solution for the nations unemployment problem as well. Those people deserve a PS3!

  • da1writer

    Posted May 5, 2008 11:25 pm GMT

    Thats good to know santiagochile, Ithanks for bringing up that "fact" of the PS3. I guess my 20+ library of games that I haven't beat yet for my PS3 is merely part of my imagination I see under my tv everyday. To get back on subject, as I see it, I actually don't think price cuts are necessary, not this year or next. Some of us actually work hard for what we want with real jobs (and overtime pay). I had no problems buying a PS3 at launch nor did alot of other people. It has been mentioned by both Microsoft and Sony that "If our consumer really wants our product, they'll find ways to earn it!" Oh, and santiagochile, thanks for the slap in the face. PS3 has games, my wife despises it when I bring home one or two new ones a month when I haven't even finished my 20+ other games that still haven't been beaten yet. REAL LIFE is a factor of why I don't finish games quickly, I got a family. I do find time to play games, just for not long period of times like people who don't work to provide for a family. Anyway, If I recall, the PS3 has actually been selling well since the 40gb PS3 came out and Japan is still not fond of the good ol 360 but huge fans of the Japan made game consoles (ie Nintendo and Sony). Price drop not need, better grab a second job or grab overtime.
    (Comment not meant to offend anyone by anymeans, just my two cents if you will !)

  • DahLong

    Posted May 4, 2008 11:34 pm GMT

    i hope there will be another 1000 units xbox 360 (no harddrive) for sale for $100 like 2006 or 2007 thanksgiving again. check spoofee.com

  • santiagochile

    Posted May 4, 2008 8:55 pm GMT

    That guy is full of it. Why would Nintendo cut the price of the Wii?? They might as well just give them away. They don't need any price cuts. The PS3, THAT needs a price cut. The PS3, besides GTA IV, doesn't have any games.

  • Hekynn

    Posted May 4, 2008 8:13 pm GMT

    GOOD they need to lower the prices for the ps3 and other consoles I wanna grab myself a ps3 =)

  • Jedilink109

    Posted May 3, 2008 8:53 pm GMT

    Eh, I've got pretty much all the systems now except the PS3. I'll ask for it for Christmas...hopefully they come out with a model with a bigger hard drive that ALSO plays PS2 games. For some reason stores seem to be getting rid of the 80GB systems. Eh, I've got a 360, Wii, PSP, DS, and...well so on. I've got plenty to do, haha. Oh yeah and why is it that Gears of War is STILL 60 bucks when the game is 2 years old now?!!?!?! There's other games that have come out way after that are BETTER games (Bioshock) that are now cheaper than it is! What's the deal people?!

  • rockstar_88

    Posted May 3, 2008 1:38 pm GMT

    Our economy is going through a recession, and while it is definitely worse than what the US may be normally be used to, it is just a normal part of an economic cycle. Every rise there must eventually be a fall to balance it out, and with that fall it will rise...eventually. I hope.

  • biggs92--

    Posted May 3, 2008 7:35 am GMT

    maybe he should lower the prices of games !! ;D

  • nate1222

    Posted May 2, 2008 2:00 pm GMT

    I DON'T see a price drop anytime soon. Wii doesn't need it. Microsoft is too damn greedy (they're still trying to force 'resource-hog' Vista down our throats and they 'out-source' tech jobs to India). And Sony is losing a crap load of money per PS3 sold. I actually want a Wii. If PS3 (minus the emulator) came down to $300, maybe. But $60 per game and NO BC has me uninterested in this new gen. Sony in particular, and Microsoft to a lesser extent, have over-shot themselves. They've made their consoles, and the development of games for them, too damn expensive. The future belongs to Nintendo.

  • BigSmitts07

    Posted May 2, 2008 11:07 am GMT

    good news of possible gaming price drops...bad news that it has to come at the expense of ailing economies...i stopped reading much of newspapers and watching the news because all it ever is is bad things and rising prices...economies right now are going nowhere fast..=/

  • andyrae11

    Posted May 2, 2008 10:05 am GMT

    "Sony said that with the Canadian dollar having significantly strengthened against the US dollar."

    Thats not true, the truth is that the US dollar has weakened to the point of being par with the Canadian dollar. Though the Canadian dollar raised slightly, only from oil profits mind you. Sony thinks again another reason to screw us Candian out of more $. Thanks alot.

  • Hvac0120

    Posted May 2, 2008 9:07 am GMT

    @adultgamer77

    I agree about with the "Greatest Hits" comment. Look at Zelda for the Wii. It has been out since launch, has sold it's fair share of copies, and still sells for the same price as it did for launch. (please let me know if that is wrong)

    Same for New Super Mario Bros on the DS. That game has certainly sold more than enough to justify a discounted price. It has also been out quite a long time.

    I'm not sure that the consoles will be able to come down so soon. If any of them would, I would think the Wii because of it's low manufacturing costs. However, since the Wii is selling so well and can't be kept on store shelves, the demand is high enough that the price doesn't need dropped. Which is understandable.

    Xbox360 has been going down slowly. The tech is getting cheaper, so those savings should go to the consumers, but they typically don't. I would hope that MS would have some compassion for their fellow Americans, but MS is know for milking every penny out of their customers [Microsoft points do not convert well to dollars - hence money gamers cannot spend and MS keeps].

    I would love to see the PS3 go down in price. I don't have one and the price is the main reason right now. I'm just not sure if Sony can continue to lower the price at this point.

  • adultgamer77

    Posted May 2, 2008 8:34 am GMT

    Most people are commenting on lowering the price of the games. I read an article last month in a gaming mag on how the pricing system works for games.

    A certain amount of dollars are given to each department (don't have the breakdown in front of me), with the R&D department obtaining more than anyone else. Neways...the reason why games cost $10 more than the previous generations has to do with the fact that selling the games @ $50 might be a make or break deal for them. @ $50 the game will have to sell a certain amount of copies 4 an actual profit gain. @ $60 it will atleast get them some money back even though it's just to cover the cost for developing the game. If there are no substancial profit made on the game...then a sequel is not likely to happen no matter how good the game is.

    I'm all for lowering the price of games but after reading that article...It makes alot of business sense to charge $60 per game, but @ the same time, if the game sells enough copies to cover the cost + profits then the game should be lowered in price because the actual goal has been made. And all these "Greatest Hits" that are released @ a fixed price...to me that is BS...a greatest hit is when the game sells a certain amount of copies or has been out for some time. I'm not gonna name names but some games take an extra long time to be in the greatest hits fixed price when we all know that the said game has surpassed the greatest hits mark.

    Please correct me if I'm wrong

  • buckybuckster

    Posted May 2, 2008 8:25 am GMT

    While it maybe "more difficult to go out and buy a $399 console", as far as i've seen, console sales seem to be none the worse for wear, even with the US economic downturn. At work we just had another sellout of Wiis (100 units). PS3s are selling better than they ever have for us outside of the holiday season. And the 360 sells just as many as it ever has. As long as this continues to be the trend, I don't foresee any price price cuts in the near future (maybe someone will announce something at E3).

    What's interesting to me is, the same thing can't be said for my friend the DS. For us DS sales are way off from what they were the same time last year and I can't figure out why. Could it be the numerous new DS rumors I keep reading about? And BTW... PSP has been selling great with more people opting for the $200 bundle...good news for the upcoming GOW set.

  • jknight5422

    Posted May 2, 2008 7:41 am GMT

    "the price of the GAMES at 60 bucks a pop is the issue, not the 300 buck price for the console." --dryden555

    Just wait 6 months to a year before purchase & then you can get many old games cheaper. More bang for the buck.

  • Rect_Pola

    Posted May 2, 2008 6:27 am GMT

    Wii has the smallest jump to go. Assuming the built-in profit of their price point has probably paid off Wii Sports development by now, it's safe to say that they wouldn't lose anything in the reduction. On the other hand, the Wii is still hard enough to find as is because it's still cleaning out so it's not smart business.

    PS3 on the otherhand, has only recently announced they've streamlined production costs to match the price. They've only recently closed the wound and stopped embarrassing themselves by selling more PS2s. They're not going to willfully start hemorrhaging money again unless their sales become unacceptable again.

    Compared to these two, surprisingly little has ever been said about Xbox 360's pricing. Even when they launched, it was a non-issue.

  • da_chub

    Posted May 2, 2008 5:52 am GMT

    $50-60 a game is a big problem, then paying $10 a month for online, plus the $40 for dsl/cable, 250-500 for a console is a 1 time investment,

  • puppiemaster

    Posted May 2, 2008 5:48 am GMT

    only $60 for a game, my god lets all move to the US, try $80 for a game then moan

  • dryden555

    Posted May 2, 2008 5:34 am GMT

    the price of the GAMES at 60 bucks a pop is the issue, not the 300 buck price for the console.

  • demoralizer

    Posted May 1, 2008 8:44 pm GMT

    360 is way over due for one. wtf it's been out the longest too. Come on MS!

  • VegetaMaelstrom

    Posted May 1, 2008 8:30 pm GMT

    "If the prices were lower I would have both a 360 and a PS3. As it is I had to sell my Xbox 360 Elite to afford the PS3. I don't regret it but when Fable 2 and Mass Effect 2 come out, I might begin to. Sony needs RPGs desperately for the PS3!"

    gord_mose don't worry. I'm sure EA will bring Mass Effect 2 over to the PS3 and every other platform under the sun including the N-Gage, cell phones, DS and Mac in one form or another. Or just do what I will be doing and wait a few short months for Mass Effect 2 and Fable 2 to make their way on to the PC for $10 cheaper and extra content for good measure. Who needs a 360 when you have a good PC?

  • littlestreakier

    Posted May 1, 2008 5:11 pm GMT

    i wish game prices came down instead

  • dlCHIEF58

    Posted May 1, 2008 4:42 pm GMT

    @serious

    Dude, check your facts. EA (NOT ACTIVISION) has the NFL rights, attempting the hostile takeover of Take-Two, and bought substantial stock in Ubisoft a while back.

  • Serious

    Posted May 1, 2008 4:27 pm GMT

    Activison has some nerve. Lower your prices while ours go up. a game used to cost $49.99 now they are all $59.99 or more for collector editions. Activision wants to reap the rewards of all the consoles new features and still charge more for their product. They"re like the bully in the sandbox that believes there isn't enough room for everybody else to play. This is the company that made NFL Football exclusively theirs. Has been trying to take over Rockstar, Ubisoft and others. These buy out attempts only raise the prices of software. well I would rather have cheaper games than console since you only have to buy a console once every few years. While games are bought 12+ times a year. So I say to Activision is lead by doing and lower your prices before asking others to do so.

  • Kravyn81

    Posted May 1, 2008 4:19 pm GMT

    I agree. When times are hard you forgo the luxuries for the necessties. A $399 console is not a necessity.

  • tesseract77

    Posted May 1, 2008 4:16 pm GMT

    Whoever said to go and get a mid-level PC for $400, you're an idiot. Clearly, you either have no idea what modern PC gaming entails, or you know nothing of hardware prices. Assuming you are building your own computer, a midrange computer will cost you at a minimum of $700.

    Besides, although consoles are becoming more and more "computer like" PC and console gaming are completely different experiences. People look to each for different things. It's the same reason that I just bought a PS3 when I have a $2000 gaming computer.

  • Collin20

    Posted May 1, 2008 4:03 pm GMT

    @shroom 76

    Glad you know what you're talking about. The government isn't forcing you to buy a TV. Your TV has nothing to do with the "lame converter box" your talking about. That is all about how you receive a signal through any TV. If you have cable or satellite you don't need one. Also, what would I play on a $400 computer that I couldn't play on my $350 XBOX where it will look better or the same. Unless you're talking about building your own no way. Even then, you wait 3 extra months to get the games...

  • ahahaG

    Posted May 1, 2008 3:40 pm GMT

    haha vintage Activision. all for lowering the price of consoles so more people have them so they can make more money.

  • sleepwalker533

    Posted May 1, 2008 3:27 pm GMT

    Forget $399 a console....... Lets work on the price of games. At $60 dollars a pop thats where people are spending the most money.

  • lamprey263

    Posted May 1, 2008 3:05 pm GMT

    well, being as Microsoft is more about trying to dominate the market than making a dollar just yet, they could probably afford to price drop more than the other companies; I mean, they had $17 billion dollars in net profit last year, yeah they can afford it

  • teirdome

    Posted May 1, 2008 2:54 pm GMT

    Microsoft is the only one of the 3 that can afford a price drop unfortunately. The drop of the American dollar over the past few months has killed the profits of Japanese based Nintendo and Sony as reflected in their stock prices sharp decline. Neither company can afford to slash prices on their consoles at the moment, though the Wii doesn't need the slash and won't until August. The PS3 like the 360 is grossly overpriced and needs another $50 knocked off.

  • shroom76

    Posted May 1, 2008 2:45 pm GMT

    just do pc gaming, everyone has a pc these days, and you can get a mid level pc for around 400$ if you know where to look.

    hd tv's (which the government is pretty much forcing everybody to buy) are way more than the consoles and everyone is going to need one or the lame converter box by febuary. needlless to say, thats the dumbest thing i'v ever heard but i dont think the price of the consoles needs to go down. GAS prices need to go down.

  • mhder

    Posted May 1, 2008 2:23 pm GMT

    If people are having "financial situations," the last thing they should be buying is a gaming console.

  • ItsEvolution

    Posted May 1, 2008 2:20 pm GMT

    If Microsoft lowered their prices, I'd buy a 360 from Best Buy (with a warranty to ward off any RRoD scenarios that may arise) to go with my PS3 and Wii.

  • webdoom

    Posted May 1, 2008 2:17 pm GMT

    Playstation Network prices.. this may sound stupid, but i thought playstation online play was free?

  • Generic_Dude

    Posted May 1, 2008 2:15 pm GMT

    Hooray for the decline of Western civilization!

  • mall69

    Posted May 1, 2008 2:13 pm GMT

    @ubermenshce.... concerning MS not being able to afford a price drop, this was posted by Gamespot on the 24th, under the heading, 'Microsoft's xbox 360 division see 68% increase'........."In a statement, Microsoft called out the division as being one of the crown jewels of its multibillion-dollar empire. "The Entertainment and Devices revenue for the quarter grew 68 percent over the comparable period last year driven by robust demand for Xbox 360 consoles," the company said. "Cumulative console sales surpassed 19 million during the quarter, up 74 percent from a year ago." For the nine months ending March 31, the department took in $6.57 billion, a year-on-year increase of $1.65 billion.........
    obviously, MS can afford a price drop. as has been stated hundreds of times in these forums, the money's in the games. there's no reason they shouldn't have dropped the price already in my opinion. they're making money on the console now, why not minimize that profit, pass the savings on to us, sell a bunch more consoles so that developers keep lining up... because even a small percentage of purchases from a large user base equals money in their pocket. not trying to argue with you, but the 360 is more than overdue for a price drop. it'd be good for them, us, gaming in general.

  • gforce007_basic

    Posted May 1, 2008 2:07 pm GMT

    Kotick is a complete dumbass. Sure he makes the completely obvious but necessary point that console hardware, except the Wii, is overpriced. But this is the same guy whose company re-releases games for full price with a sliver of added content, like COD 4 and marvel ultimate alliance. How about game prices dropping back down to 50 dollars, where they should have been the whole time? You don't think that's yet another pressure holding back game sales? I see two year old games still selling for 60 bucks and you guys think console hardware is the only thing that's overpriced? Let's try controllers, accessories, face plates, downloadable content, in ADDITION to the hardware and games. The entire industry has spent enough time price gouging customers with the promise of the next generation. We are firmly in a generation already and it's time the prices reflected some more fairness.

  • desert_e_909

    Posted May 1, 2008 2:03 pm GMT

    The way I see it is the 360 and Wii having marginal price decrease by 2009,seeing as how they are already the most reasonably priced of the three consoles,the PS3 on the other hand wont have no 199 price by 2009,that is rediculously too low IMO,but further down the road a 199 price tag for a PS3 is possible.At the most I see it being cut down to perhaps 300 or 350 a little bit more in the affordable price range for everyone.But really the games are what should be recieving a price cut,60+ dollars for a game is a bit too much.

  • enoslives7

    Posted May 1, 2008 1:52 pm GMT

    I would buy a PS3 for 199.00 . But it wont happen anytime soon.

  • Bodboy466

    Posted May 1, 2008 1:50 pm GMT

    I don't know about the other consoles, but the PS3 has its own sports line, so "one company in control of the sports category" isn't really a problem I'm worried about. Hell, The Show beat out 2K8 on many levels recently, so I'm fine should I ever want to touch a sports game (besides Hot Shots Golf which I'm loving).

  • RLJSlick

    Posted May 1, 2008 1:48 pm GMT

    The console prices maybe too high, but what's way to high are the price of games! It's ridiculous to pay $60 for a console game, when you can get a PC game as low as $39! I'm down to buying a game every other month or so. The rest of my money go to gas. LOL

  • MKfun1

    Posted May 1, 2008 1:45 pm GMT

    What is up with everyone negating the need for a price drop? The economy is bad enough that I forsee an imminent price drop on at least the 360 and the PS3. Other countries have had a price drop, it's just a matter of time before the U.S. gets one too.

  • Senor_Kami

    Posted May 1, 2008 1:43 pm GMT

    I don't think they'll NEED to be at a lower price until sales start dropping. The Wii is still a monster, 360 sales have increased from last year on a global level, PS3 has done the same.

    The only reason to price drop is to beat the competition over the head. Nobody is really having issues involving low demand right now.

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