PS3 Game Sales Insert Foot in Kotick’s Mouth

November 6, 2009 Written by Kyle P.

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Over the past year, Bobby Kotick, CEO of Activision Blizzard, has frightened and angered many gamers, particularly PS3 fans. A few months ago, before the September price cut, he publicly threatened (whether his words had substance is another story) Sony to cut the price of the PS3, or Activision would cut support from the overpriced behemoth.

Even more recently, PC gamers are furious that Modern Warfare 2, Activision’s flagship title, is priced $10 more than regularly priced PC games. That, and custom servers, a cornerstone for gaming communities, would not be in Modern Warfare 2.

Many gamers have taken action into their own hands, they have created countless online petitions (although one, created by the announcement of no custom servers for the PC version, reached well over 150,000 votes) and boycotts, never doing any coordinated damage. Well, Activision’s recent financial report shows that even disgruntled gamers buy games.

PS3 sales represented 10% of Activision’s Q3 results, bringing in $73 million. This fell just short of the Xbox 360, which accounted for 15%, totaling $103 million. Compare these numbers to last year, when the PS3, and PS2 each accounted for 9% of Activision’s Q3 numbers. That year, the Xbox 360 took 11%.

All in all, Activision saw a net revenue of $703 million, so far this year. With the impending release of Modern Warfare 2-one of the year’s biggest games- they have raised their projections to a staggering $1.3 billion income for their financial year.

Robert Kotick, CEO of Activision Blizzard had this to say on the numbers:

Our performance was driven by positive audience response to Activision Publishing’s Guitar Hero 5, Marvel: Ultimate Alliance 2, and the Guitar Hero® and Call of Duty® franchises, as well as Blizzard Entertainment®’s World of Warcraft®. Year to date through September 30, the Guitar Hero franchise was the #1 best-selling third-party franchise in North America and Europe. For the month of September, sales of music games in the U.S. increased 72% in dollars year over year, which demonstrates the sustained interest in this new and important game category.

During the quarter, we continued to see strong sales for Call of Duty World at War™ and associated map packs, which year to date have sold more than seven and half million units. Despite a challenging overall software market, the company grew its quarterly U.S. share by 3.1 points over the previous year to 13.3%. This success is the result of our focus on delivering the highest game quality and the best entertainment experiences possible for our consumers.

“We believe we have the industry’s strongest holiday release schedule which includes Bakugan Battle Brawlers™, Band Hero, Infinity Ward’s Call of Duty: Modern Warfare® 2, DJ Hero and Tony Hawk®: RIDE™. We are committed to making great games and our fall releases deliver against this more than ever before.

“As of today, our calendar 2009 financial outlook remains unchanged, and we still expect to deliver record non-GAAP operating margins based on the strength of the Call of Duty franchise and high consumer anticipation for Modern Warfare 2, which we project could be the largest entertainment launch of the year. Even though there is a great deal of economic uncertainty in the marketplace and the consumer risks around the holiday season are high, we believe that our strong balance sheet and solid cash position, coupled with our leading franchises, operational capabilities and broad global reach will enable us to take advantage of the long-term opportunities afforded by our industry.”

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