Sony Could Be In Serious Trouble

Bobby Kotick ready to axe Sony.When you’ve taken a company from $10 million yearly revenues to nearly $200 million quarterly revenues, you can pretty much say what you want. If your new company also happens to be worth some $16 billion, you can also say those things to whomever you like, even if it happens to be Sony.

That’s exactly what’s happening between Bobby Kotick, Activision Blizzard’s President and CEO (that would be the $16 billion company), and Sony. Kotick has apparently been frustrated with the fees Sony charges for what he thinks may be a dying platform.

“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. 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,” Kotick says. “When we look at 2010 and 2011, we might want to consider if we support [PS3 and PSP].”

For those of you keeping track at home, that’s next year. As in, six months from now. And if Activision sees fit to pull the plug, who’s next? Other developers have voiced issue with Sony licensing fees and the difficulties of developing on their hardware. Would EA see fit to cut ties?

As compelling a case as Kotick might put together, he seems a bit blind when it comes to ideas for saving Sony. In this same interview, Mr. Kotick suggests Sony consider things like the upcoming skateboard controller for a new Tony Hawk title. Are peripherals really what’s slowing the company? I could be wrong here, but how does adding a peripheral, which will probably be available on the other two consoles, help PS3 sales? How does that cut back the fees Kotick so loathes? And what of development? PS3 will still cost more per title for the same game, so where’s the benefit?

In running Sony into the ground is my guess. Kotick’s suggestion leads one direction – further marginalization of the PS3. If they keep releasing the same games and the same peripherals as everyone else, they’ll keep getting beat, for all the reasons Kotick cites early on. Then he doesn’t have to make the tough decision because every developer would leave with him.

For now you can rest assured Activision is still making plenty of money off Sony, but I’d bet other developers share some of Kotick’s thoughts, if not his fervor for making them public. Will Sony respond, or is Kotick just a blowhard? Sound off in the comments.

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