Activision CEO says US economy could cause console price drop

by Alexander Sliwinski { May 1st 2008 at 10:45AM }

Speaking to Reuters, Activision CEO Bobby Kotick said the slowing US economy will pressure console makers to lower prices. He believes with the rising costs of "fuel and food and housing," it's difficult to go out and buy a $399 console. Kotick also mentioned that he's concerned about EA's hostile takeover attempts of Take-Two because it'll essentially mean one company controls the video game sports category.

Considering Activision is in the software business, it isn't surprising Kotick would want consoles to be cheaper and be in as many homes as possible. This isn't the first time he's made statements like this, and as long as Activision doesn't get into hardware, it probably won't be the last. As much as we're happy to share Kotick's dream of cheaper consoles, we know that Nintendo isn't dropping prices anytime soon.

Image update: You're welcome, Copa.

Tags: activision, bobby-kotick, kotick

Reader Comments (Page 1 of 1)

copa @ May 1st 2008 10:55AM

Really, Alex? You couldn't be bothered to Photoshop a black-and-white XBox 360 with a $199 price tag into the Depression area photograph?

Slacker.

Jerk Face @ May 1st 2008 11:27AM

That is actually a really powerful photograph.. I mean just look at their faces. Man.. I'm all depressed now.

baby sea tuna @ May 1st 2008 11:45AM

http://i3.photobucket.com/albums/y94/baby_sea_tuna/Blogger/consoledepression_web.jpg

baby sea tuna @ May 1st 2008 11:52AM

Image update: You're even more welcome, copa.

bigmac375 @ May 1st 2008 2:50PM

yeea its alexander

Joshua @ May 1st 2008 8:04PM

But look at the kids! They're smiling!

Why can't the other people be like them?

FOXHOUND @ May 1st 2008 11:01AM

I doubt they'll drop the cost of consoles anytime soon. It would cause too much of a domino effect of failure... which include massive lay offs, possible decline in quality control, and more shovelware/ported titles than ever -- on ALL consoles.

Rabidkeebler @ May 1st 2008 1:04PM

I agree, but for different reasons. From the reports that I have been hearing, instead of skimping on the really expensive purchases, people are skimping on the minimal purchases (ie, brewing coffee, or buying from Dunkin Doughnuts instead of Starbucks) or other things along this line. Supposedly, the big purchases like TVs are not being affected (or not affected a whole lot) but the recession. This could change though.

vidGuy @ May 1st 2008 11:02AM

Yes and no. Americans are spending less on wants and luxuries, but video games aren't one of those things that gets crushed very often. Price drops are coming, but probably not until the holiday. After all, many people are going to get checks for $300-$600 in the mail in the next few weeks - should be a profitable time for gaming companies.

E.J. @ May 1st 2008 1:36PM

Tax rebates ftw.

NoHitHair @ May 1st 2008 2:56PM

"...should be a profitable time for gaming companies."

Yup. Because people don't have bills to pay or anything.

http://www.cbsnews.com/stories/2008/04/28/national/main4051110.shtml?source=mostpop_story

vidGuy @ May 1st 2008 3:06PM

It's very possible that much of the stimulus checks will go to paying bills and credit cards. It's fairly obvious that the checks will have little to no overall effect on the economy.

However, people are already paying bills. Adding $600 to their pockets gives them $600 more to spend on something else. It works the same way with welfare and food stamps - that money goes to food, while the rest of that person's money (which should have gone to food) goes to wants like cigs, beer, etc.

The stimulus checks will affect the economy, but not nearly as much as we need. I don't need CBS to tell me that.

ViagraFiend @ May 1st 2008 11:08AM

I was just thinking...doesnt 2k own the rights to the MLB? They let Sony make the Show and they dont allow EA to make a baseball game because of EA's monopoly over football.

So does that mean if EA buys Take2, they will essentially hold the rights to the MLB and will not allow Sony to make The Show anymore?

We just cannot allow this to happen. I dont want to see our baseball games go the way of Madden and constantly get worse each year.

J.Goodwin @ May 1st 2008 11:28AM

Sports exclusivity deals to date all have an exception for console makers to produce a first party sports title in that franchise (basically in case someone pulls an EA again and decides that they just won't develop on a given console).

dave @ May 1st 2008 11:13AM

With that logic they should lower the prices on 60 dollar games too.

Korova @ May 1st 2008 11:21AM

That is an awesome gaming set up - its outside, shielded from the sun. The guy obviously knows what he is doing as he got chicks handing around. He is obviously loaded, as evidenced by the trunk full of games and gear right in front.

Man, I am jealous!

Zsavior @ May 1st 2008 11:23AM

I was wondering this same thing also. Video games aren't the leisurely past time they used to be. With consoles going for 399 and games going for 60 dollars people are going to look at these numbers and just say they aren't worth it.

For the High market gamer that gaming is their life, and their hobby I believe this won't be a problem. Those types of gamers buy video games instead of going to movies, and or other social things. But to the lower and middle market gamers, gaming won't be something they will be spending money on in the coming months because they don't have the same attachment. Especially as food and Oil hit all time highs, gaming just won't be a priority, unless your system is already pretty cheap.

Ethan @ May 1st 2008 11:32AM

The 360 isn't cheaper in India because the GDP per capita is lower. In fact, it's more expensive. I think it'll make them more reticent to drop price, because a small price difference will not stop it from being a luxury good, and seen as such.

Sinnix @ May 1st 2008 11:53AM

Of course *HE* wants a price drop, he's not selling them! More consoles in consumers homes means more people to buy his software. His ideal world is a place where consoles are free and games are 50% margin.

Joe @ May 1st 2008 12:28PM

This would be great news for people still on the fence of getting a PS3. So I would love a price cut. As for the Wii I could see the Wii go up in price and people would still buy that system.

Kujel @ May 1st 2008 1:16PM

Screw a Nintendo price drop, cut the cost of a 360 Elite!

John McPoop @ May 1st 2008 1:25PM

Prices will drop as the technology is cheaper to produce. Those savings will not come right away but I expect a price drop for everything except the Wii around the November/December holiday time this year.

The Wii could see a price drop if the 360 Arcade comes at or below that $250.00 price point. I think a $50.00-$75.00 price drop would help the PS3 the most mainly because it is the most expensive out of the box and has the least market share.

Microsoft is almost certainly waiting for a PS3 price drop before they also implement another price drop on the 360. I think they will do that to take away the potential momentum of a PS3 price drop. At this point the PS3 has the most expensive manufacturing cost and is the most reasonably priced in comparison to those manufacturing cost.

It seems a sweet spot for consoles in terms of affordability is right where the Wii and the 360 Arcade are.

Leobebes @ May 1st 2008 1:35PM

I honestly expected a price drop around the GTA IV release for the 360, but it didn't happen in the States. So I am assuming a larger than expected price cut on the 360 around Christmas time. Dare I say a $75 price break for all their consoles?

Professor Lario @ May 1st 2008 2:06PM

Slightly inappropriate pic IMO. I like a laugh as much as the next guy, but using pictures of people in pain/hardship goes a little far...

TendoMan @ May 1st 2008 3:52PM

I would gladly buy myself an Xbox360, but even with the stimulus plan checks coming in a few weeks, I need to use the money for bills and a wedding.

I do wish that they would lower the cost though, I would be in front of my Best Buy ASAP.

Unfortunately, being an adult gamer, I need to manage my money between bills, the house, gas (4.00 a gallon here), etc, before I can even contemplate buying a new console.