Sony dismisses Activision threats, PS3 price cut rumors

Ever since the PlayStation 3 launched in November 2006, third-party publishers have been grumbling that it is too expensive. That dissatisfaction came to a head last month, when the world's largest third-party publisher publicly threatened to discontinue support of the costly-to-develop-for platform, which lags behind the rival Wii and Xbox 360 in terms of market share.

"They have to cut the price because if they don't, the attach rates are likely to slow," said Activision Blizzard CEO Bobby Kotick. "If we are being realistic, we might have to stop supporting Sony….When we look at 2010 and 2011, we might want to consider if we support the console--and the PSP."

Today, Sony Corp. CEO Sir Howard Stringer responded directly--and dismissively--to Kotick's comments. "He likes to make a lot of noise," the Welsh-born executive told Reuters at a tech conference in Sun Valley, Idaho, which Kotick is also attending. "He's putting pressure on me, and I'm putting pressure on him. That's the nature of business. … [But] I lose money on every PlayStation I make--how's that for logic?"

Speaking of the PS3, Sony Computer Entertainment America CEO Jack Tretton deflected questions that a widely rumored reduction in the console's cost could come as early as next month. "We feel that we're sacrificing the short term to pay dividends in the long term," he told Silicon Valley magazine Fast Company. "People are having short-term thinking--the platform is not even three years old…. It costs a lot to invest in rolling out new technology, and if the consumer walks away before the life cycle is over--you can talk about the install base of hardware, but how many of those machines are still active, how many people are still playing them?"

Tretton also said he hoped 2008 was the nadir of the worldwide economic recession, which has slowed the game industry in general and sales of the $399/$499 PS3 in particular. Still, he pointed to an increase in the console's market share last year as a sign of progress.

"In 2008, we had a 38 percent increase in sales and we hit our 10-million-units-worldwide goal for PS3 sales," he explained. "We had $6.4 billion in revenue in US alone on the PlayStation brand, and a 116 percent increase in software sales. At the worst possible time, if you're hitting numbers and delivering success... my hope is that as our production efficiencies improve and more great games come to market, the horizon has got to be better for 2009 and 2010."