Sony Should Run Some Price Cuts

Activision Blizzard, the world’s largest producer of video games has publicly announced to abandon Sony’s PS3 and PSP platforms.

Boby Kotick, president and CEO of Activision Blizzard, relates about his concerns on Sony since the PlayStation 3 is losing ground for the time being, this being not helpful in supporting the platform. Wii and the Xbox sell better and the games generated through them return a better profit than PlayStation. A developing for a console proves to be expensive and without this, the future looks rather gloomy. Mr. Kotick says that he would rather satisfied to see that Sony reduces the licensing fees and perhaps a PS3 price cut wouldn’t hurt.

activision-blizzardActivision did rather good things, they have replaced the traditional “shoot’em up” headlines with the ones family–oriented, interactive games, as Guitar Hero proved to be a big hit with more than $1 billion gross income. This year, DJ Hero will follow, though Viacom’s Rockband is present on the market, with their Beatles-theme launch.

Compared to Nintendo, which reinvented games with the Wii, Sony reacted very slow, as Mr. Kotick points out by standing on a plastic skateboard that turns out to be the old controller for Tony Hawk:Ride – the company’s trial to arouse again the well-worn franchise. Through its motion and infra-red sensors, the board can detect moves in player’s body and feet, the speed being provided by swiping a foot on the floor next to the board.

As response Sony replied that PS3 price-cuts don’t make the object on their thing-to-do agenda, but according to some leaks, the console will support a $100 reduction in the mid-August. This discount would appear at the same time with the back-to-school shopping season, they considered as being a good timing for the game industry as well. Software should also see an upturn as the sales will rise 10 to 15 percent in the second half of the year.

The customers’ reaction is mostly positive to Mr. Kotick’s attitude, though many of them doubt that he will take further steps into ditching PS3/PSP. They agree to the fact that lowering the prices, making the online system more competitive with Xbox Live, could be some changes that favor Sony’s position on the market sales. They also said that competition is tough coming from behind with BluRay’s big selling points and Xbox 360 together with Wii consoles that sell at a cheaper price.

Other customers are of the opinion that they doubt that Activision Blizzard will hold on to their positions, since PS3 is undoubtedly the most future-ready. Some state that past performance does not represent a guarantee for a continuous success, and what was that Mr. Kotick actually meant was that he was concerned about the profitability of PS3 in the future.

So the question still remains: Should Sony be concerned that Activision Blizzard might ditch them? And if the answer is yes, then Sony should run some price cuts for their products.

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