Activision warns of Xbox 720, PlayStation 4 'uncertainties'

Activision's president and chief executive Bobby Kotick has warned investors that the upcoming launch of Sony's PlayStation 4 and Microsoft's next-generation Xbox may not be the gift to the company others are claiming - and that the games industry may have some tough times ahead.

Speaking during his company's most recent earnings call this week, Kotick warned that he has some concerns surrounding the launch of next-generation consoles from Microsoft and Sony later this year. 'We continue to face the uncertainties of the console transition,' Kotick told investors. 'There are still many unknown factors, such as pricing, launch dates and quantities, the level of first-party support and, importantly, consumer purchase intent in a world where consoles are no longer just competing with each other, but also with new platforms, such as smartphones and tablets.'

[DivineAssault]

Activision needs to just keep quiet & keep pumping out more COD

[ZodTheRipper]

"And our next Call of Duty game will face a more competitive environment than last year. The competitive landscape will likely require us to further increase our sales and marketing investments for our 3 largest franchises, especially in the important holiday season.'"

/facepalm

Instead of increasing development investments they increase SALES and MARKETING ...the only one who's losing are the gamers who'll get an overhyped game in the end just like the last couple of CoD's. It's sad to see that gaming has become pure business by this time.

[kayoss]

Activision is just worried that they cant use the same COD foundation with just a different skin for the next Gen. This mean that they need to upgrade the graphics, gameplay, mechanics for next gen. COD is like the new madden, same game just different skin.

[bangshi]

They did increase development budget. That is why Nevasoft now work on COD.

IW also had a relatively large recruitment drive and moved to larger (more expensive) offices.

So they have increased expenditure in other areas.

Using extremes to highlight my point, it matters not if you spend $1 or $1 billion on your game.

You could spend $100 million here, $10 million there. It doesn't mean it will be a better game.

But the game that spends $1 billion on marketing will more than likely (although of course never guaranteed) sell more than the game that spends $1.

When up against stiff, direct competition marketing is critical.

Naturally how the game looks and plays is key, but do not underestimate the marketing effect.

[Godz Kastro]

Dont buy the game and you wont lose anything. I couldve sworn they havent shown off new engine/game yet. You must be from the future.

[SuperBazza]

Remember, zod18: Kotick is the guy who has said in the past that "developers should always be told they are under a terrible economy, that nothing is certain in the business".

He uses that as a weapon to run Activision by fear and rip teams as he pleases, without any consideration for their artistic integrity, and it seems to me that he will be exploiting feelings of uncertainty to the extent he can get away with once again.

Such a snake, this man. I don't really know about his efficiency, but he's a jerk in all cases.

[Saigon]

I am starting to get sick of Activision, I am starting to see a pattern with them. Every generation they complain about the new system that are prepped to come out and each generation they seem to dominate in sales. I think this is their pattern for good luck. They just need to keep creating games and let the games do the talking for them. Though EA is hated, I at least commend them for keeping their mouth shut when needed or always speak positive about the systems.

[JsonHenry]

Bobby is talking about money. He knows money. People should listen to him when he talks about unknowns in relation to making money.

If he was talking about making games, making gamers happy, and other things gaming related at the point of being an end user I would ignore him.

[Hueynewton2012]

What they are trying to say is that their main franchise and money maker COD faces an uncertain future due to stiff competition from battlefield and other emerging choices the next generation will offer.

Why im not concerned is because Sony still has a bunch of 1st party devs and the new system has already been considered dev friendly. If Microsoft comes thru it will be icing on the cake for me. If Microsoft brings the pain it means all core gamers win. Gamers should be cheering for both systems to prosper due to the Wii U floundering and all this IOS, tablet and phone gaming non sense that has created mild uncertainty.

[GamerzElite]

What they will show at XBox Infinty reveal event? COD: Ghost playing first time on XBox 360 at XBox Infinity reveal event... LOL

[Scholla]

lmboooooooooooooooo @Divine @Kratos @Igam3r

[nypifisel]

They're right about some things. The smartphones and tablets will compete with the consoles, but this only apply to the casual market! The casuals that flocked in to the market with Wii and Kinect. They fail to understand that these weren't actual customers to begin with, they wouldn't had bought the next GoW or CoD or whatever, they bought Kinect sports, or Wii Sports, maybe another title. That's about it.

Smartphones can give casuals an experience they've come to expect from games, it's light and fluffy. Hardcore gamers won't settle with that and won't settle with the simple minded nature of smartphone games. In that sense they're stupid to think the gamer market will shrink cause of phones, it wont. The console hardware market will however when casuals don't buy the next generation.

[ichimaru]

well I suppose Activision is in a position to know these things I suppose

[ZodTheRipper]

It should say enough that he's taking the Wii U's failure to reinforce his statements. Of course there's some truth in his words, consumers have only x-amount of cash to spend on gaming and now that almost any device can be used for games, the market share for consoles has dropped a bit. But the demand for high quality productions will probably never be in decline so it's pretty pessimistic to say something like that as a CEO of one of the biggest publishers worldwide.

[Dark_Overlord]

This is the part that stuck out most for me

"the level of first-party support"

As he's talking about the PS4 and next Xbox, I believe this reference is in relation to the next Xbox (Cause Sony have a ton of 1st Party support).

I'm curious as to what he knows (Or believes he knows).

[Jdoki]

That is an interesting part of the statement.

But I can see it two ways...

1. If a console doesn't get enough 1st party support it can impact hardware sales and therefore 3rd party titles don't sell as the install base it too small

2. If a console has loads of 1st party support then Activision are up against titles that are (usually) of much higher quality, so it can also hurt their sales.

In some ways, as the XBox has woeful 1st party support for the core gamer, and we know MS will throw more money at marketing rather than fresh in-house IP, Activision are perfectly poised to scoop up more sales on next gen XBox.

[kayoss]

But isnt thats the case for every Gen? Software support will be slow at first including first party and 3rd party, but once the ball get rolling everything will be fine. The PS2 era was probably one of the best era for gaming. But when they started to convert to next gen, it took a while and now the PS2, xbox, dreamcast, and N64 are the thing of the past.

[Bleucrunch]

Activision is concerned about the fact they do not have a large library of games in their camp. I man COD craze will die down as I don't believe it is as good as it was before...Activision will actually have to sit down and think about creating new IP's and this make Kotick itch where the sun don't shine.

[ALLWRONG]

"I believe this reference is in relation to the next Xbox (Cause Sony have a ton of 1st Party support)."

Sony has closed down studios and MS now has more first party devs on the next Xbox.

[Skips]

You may be right...

But more than half of those studios are either no names, small studios who've worked on nothing but tiny mobile/XBLA games with probably 10 or 15 employees, (or even worse) studios who are forced to work on nothing but Kinect. -_-

Only ones actually worth a damn are 343 and Turn 10...

[Bigpappy]

Jdoki is correct. Publishers do not like 1st party competition. M$ had to kill off their 1st and 2nd party sports series to get EA to bring their sports games to the original Xbox. If first party is too dominant (Nintendo), 3rd party tend to not have strong support for the system.

Another good point from Bobby is we don't know what the initial supply of consoles will be. Usually, they purposely or un-purposely do not stock enough to meet demand at release.

[cleft5]

It's surprising to see Kotick of all people speaking common sense, but it does just show that their is a reason they put this guy in charge. I am hyped for next-gen as a gamer that wants to play the latest and greatest. But I also know that development cost are going to be a lot higher.

The costs want change right away because the new titles will basically be up scaled 360/ps3 titles. After those are out and developers start taking advantage of the systems true potential cost are going to jump. Combine that with marketing cost and you have a combination that is going to see a lot of companies go under if their title isn't a mega success. Just look at the whole Tomb Raider thing.

[dcbronco]

I think Bobby is just trying to get ahead of diminishing CoD sales caused by higher BF4 sales. He can make all of the excuses he wants. The reality is many are getting tired of the annual re-hash CoD has become. Treyarch continues to try to innovate, but without Infinity Ward there to re-build the engines Bobby knows he has a problem.

[cleft5]

Maybe so but it is still a billion seller and ultimately thats what these companies care about.

[dcbronco]

Definitely still a huge seller. But over the next few years sales will fall more and more until it becomes a 5 million copy seller instead of a 25 million copy seller. Five is still great by most standards. But it will be a huge fall off.

[DOMination-]

That won't happen unless another game comes along and reinvents and redefines the genre. Good game though it may be, BF4 or KZ aren't going to cut it. Maybe Respawns game will? Though i imagine even that will be more evolution rather than revolution.

This isn't just an fps problem either. I don't think I've seen a next gen game that's interested me yet. They are all following the same formula just with better graphics.

The best I've seen so far is The Witness which tells you the state of gaming right now.

[dcbronco]

I don't think another game has to do it. Once the Internet turns against something it usually snowballs. And the Internet has been going against CoD lately. Whether or not something is good or there is a better option has never mattered before. The only thing needed is for the bad comments to keep coming.

[Jek_Porkins]

Well he isn't entirely wrong, we don't know pricing, release dates or all of the games that will be available right away. No matter how you slice it, the install base on these new consoles isn't going to be as appealing as the current ones for the foreseeable future.

We all assume the Wii U is doing poorly for one reason or another, but it could very well be a trend in the industry, I mean who doesn't see the Xbox 360 and PS3 outselling the Xbox Infinity and PS4 for at least a year?

I think if people have the choice between a $99 Xbox 360 or $199 PS3, those are going to look very appealing to parents and a lot of people in comparison to possible $400-$500 new consoles.

It'll be interesting to see how it all works out, I love gaming and hope everything rebounds, but we've never launched a console generation with so much competition from things like tablets and phones.

[Gr81]

Too Mention consoles that may be looking at a $4-500 price tag in an economy in the shitter still. This guys warning might look prophetic in the near future.

[Bleucrunch]

Yes but its Activision doing the warning...with their history they haven't earned that right with the way they do things. Kotick needs to focus on the incoming new hardware...OR create your own console and see if your loyal COD fan base will purchase a console from you just to play ONE kind of game ALL THE TIME!

[raWfodog]

Yes but the only ones who will be buying $99 360's and $199 PS3's are people who don't already own them. The current owners of those systems are more than likely going to be looking to buy the next generations (price willing).

In the article, the author stated:
"It's hard to fault Kotick's analysis: the Wii U has been a poor seller for Nintendo, and has seen a whopping £100 knocked off its £299 recommended retail price since its launch last year. A lack of triple-A games from third party developers - something that may not change any time soon, with numerous publishers stating outright that their franchises won't be making the move to the Wii U - combined with the misconception among the company's casual gaming customers that the Wii U is a mere upgraded version of the Wii they already own are thought to be to blame, with Nintendo working hard to correct both issues."

The author tries to use the WiiU as an example of the 'doomed' console industry but does anyone think the PS4 or Nexbox (Fusion?) will have a lack of developers making games for the systems? And everyone knows that these systems (at least the PS4 so far) is not simply an 'upgraded' version of the current system. The WiiU's problem is that it is not innovating.

[Jek_Porkins]

I think the next Xbox and PlayStation could see some developers not develop for the consoles right away, and the same reason as to why some aren't developing for the Wii U right now, the install base just isn't large enough for every developer to jump in.

Even developers like Deep Silver said they will "eventually" develop for the next Xbox and PlayStation, but not right away.

I'd expect in a year or so most will jump on board, where as the Wii U hasn't been out but six months, I'm sure more will get on board with it when the install base is there.

I think there still might be core gamer's who went with either Sony or Microsoft as a solo console owner, those people might very well jump in and play the back catalog if prices do drop.

My younger brother is a good example, Xbox fan all the way, but is interested in a PS3 if it drops to $199, just to play older games that he missed out on. I suspect there might be gamer's thinking the same thing. Also, parents love to buy their kids the "hot" item, but short supplies and cheaper price could push quite a few older consoles.

It's all speculation on my part anyway.

[Belking]

He is right and these console aren't going to sell like everyone is thinking. They will struggle like the wii-u. People will still spend more on the older console's games. Only those die hards will go out and buy the new ones and that won't be as many as people are expecting.

[JuleyJules]

I've said this before and talked with PS3/360 owners I know who've just got into those systems which are selling well even now. They are not jumping on board right away and I think that trend will carry over to lots of Sony/MS fans - more than people realize. The Wii sales slowed down for a couple of years before the Wii U launch and look how that has turned out. Granted I know Nintendo could have done things better but still it is what it is at this point. If costs are high for systems and games that will deter people. If there aren't a lot of games at launch that's another factor. Nintendo learned that the hard way as they learned that developing for a new platform they aren't used to costs more and takes longer. They've said they'd rather take longer for a better game than put out one quickly only to have it suck and bomb. The market is not what it was when PS3/360/Wii launched and really how did those launches go for Sony/MS? Time will tell but I think Belking is on the right track as is the CEO of Activision. After all it's his job to study the market and have some clue as to what is going on.

[JuleyJules]

I'm not saying this scenario will happen but if it did I can just see the internet message boards:

Sony and Microsoft fight tooth and nail, head to head for gamers. The new systems come out and as we've said their launches might be similar to Nintendo. Meanwhile, Nintendo steps up their marketing (which should have been done all along); releases key games on schedule (also should have been done) like Mario 3D, Mario Kart, X, Pikmin 3, Bayonetta 2 etc before Christmas. They're not fighting directly with the others but everyone wants sales. As many people mention Nintendo makes kiddie games. Well those kiddies at Christmas time are very persuasive. So if there are games like I mentioned above and the price is lower for Wii U compared to the other systems those kids might just be getting a Wii U at Christmas. My point (which may not happen and I get that) is that while the others fight Nintendo might just see sales rise as there are other older gamers waiting for games like Bayonetta 2, Smash Brothers, Wind Waker HD, Zelda HD (2014), Retro's new game etc. Gamers might just be surprised come the end of 2013.

Also, if this does happen we might see in 2014 smaller developers making games for Wii U while they wait for the install base to grow for the PS4/720 should they have a slow start like the CEO of Activision is predicting. Some developers have said they aren't doing Wii U games yet until the base is there which makes sense.

[fei-hung]

I think this is more to do with Activision not Hapy with making COD on current and Next gen platforms due to cost as well nut being happy about 1st party studios potentially making COD look like crap.

Activision will take a heavy beating if they let battlefield less the next gen fps competition. All those COD fans who haven't played another fps outside of COD will be dying what they have been missing out on and then getting them back will be a lot more difficult.

[SnakeCQC]

anyone taking bets if activision will still be using the same cog engine on their "next gen" games

[v0rt3x]

you might not like the company - but they are one of the few companies who are well versed in gaming platforms - and not only "the big three" - but other smaller platforms as well. We should be wise not to immediately dismiss what they have to say - but equally it doesn't mean everything they say is automatically true.

[hesido]

I'll do my part: I'll buy a next gen console and I'll buy some games to go with it. I ask everybody to do the same. While I understand Activision's worries, the only uncertainty on my part is if I'm actually going to buy COD next gen.

[nevin1]

eventhough i been saying this too, but its funny he's saying it because isnt the new COD will be at the xbox reveal?

[zebrahim]

I logged n just to respond to this after months of silence on the n4g comments section. Bobby Kotick is a classic example of dangerous leadership. His approach is fuelled with retarded remarks and a detached perception of reality. Unfortunately though, his luck with regurgitation of sub-standard software (COD)gives him a false sense of stature to comment. Nintendo, over the last few years have been an anomaly, gaining success of the back of an uneducated customer (soccer moms and noobs). This is irony at play as Activision runs the same risk gaining success of a similar principle, but bearing the risk of falling foul in the long running, a self fulfilled prophecy if you will.

[ceejaa]

I think whoever makes statements like tablets and phones are cutting into gaming sales is an idiot. No one who plays xbox or playstation is going to be like "I was gonna buy a new console but I'm cool with my angry birds and fruit ninja"

[irokster]

Exactly. I don't understand where people get that the experience is the same on mobile platforms compared to consoles.

[raWfodog]

Exactly. Many people fail to realize that all mobile gaming is doing is opening up an avenue to more 'casual' gamers> These are people who would not necessarily buy a major console just to play games but will quickly buy a .99 cent game from the app store. The serious gamers are the ones that these consoles are geared towards and I have yet to see one of us give up our consoles just to play games on tablets all day.

[jukins]

why are people ignoring the obvious signs that this situation is entirely possible for the next playstation and xbox? just because it comes from someone you dont like we shouldnt dismiss it but the industry as a whole is on a decline with multiple factors to blame (economy, longer console generations more competition etc).

Many popular franchises are on the decline, publishers calling 2+ mill sales failures. I honestly hope sony and microsoft can bring life back into the industry because gaming is in an awkward transition state.

[yugovega]

the gamin crash of 2014. its gonna be sad when first parties release more games in a year then 3rd parties but its coming.

[FrigidDARKNESS]

Wekk, its no secret thst the console market has eroded giving away to the IOS devices. The first three years of the ps4 and next xbox are going to be crucial to see if they can regain the market back.

[CEOSteveBallmer]

I don't think PS3/360/Wii/Wii-U gamers will replace their gaming fix with smartphone games. Remember, the reason console sales are on a decline is because almost all "Core" gamers have bought a PS3, 360 and Both!. But demographically, Small kids, Granparents and parents who are not tech savvy "outnumber" core gamers. So they prefer to game on tablets and smartphones which have easy games that you don't need to learn complex controls and mechanics that we play on consoles. Ive made my aunt and mom try to play uncharted but its too difficult for them to point the gun with the 2nd analog stick. So they just preferred to play on mobile devices. And casuals are the reasons why Wii is a success. I don't know now that times have changed. Nintendo cannot expect casuals to buy again their console because they are comfortable with smartphones and tablets

[Cyfyxtfg]

interesting

[Ninjamonkey82]

Pooor Activison having to move off the COD2 milking engine after all these years most have came as an awful shock :o.

[OC_MurphysLaw]

As much as I am not a Kotick fan, what he said to investors makes a lot of sense at this point. There are still many unknown things about both next gen consoles and most of what is unknown would have direct impact on 3rd party software sales.

[thehitman]

Um.... this statement came from their annual report which is a business meeting directed at the shareholders. I actually read briefly through their report and didnt see anything any other company would have not said. Its political jargon and pretty normal statement when your forecasting future expenses, revenues and profits. Doesnt mean at all they dont see lots of success ahead its just if things dont go well we at least said so kind of thing to their shareholders.

[CEOSteveBallmer]

All business types are a gamble and risk. It maybe somehow true that consoles are competing with mobile games and smartphones. But I don't believe that all people who used to play on 360/PS3/Wii will now convert to play iOS and Android games. I play also on android and iOS but I will never every replace my true gaming systems. PC and Consoles.

[Th3 Chr0nic]

They have no one but themselves to blame for watering down everything they put their hands on. they will never admit it but they have done more damage than anyone else. EA gets made to look like the worst bad guy in the industry but its really activi$ion that is draining the life out of gaming

[WickedLester]

Couldn't this be said at the beginning of ANY new console generation though? There is always uncertainty when you're starting from scratch and building a brand new userbase from the ground up. I do not agree with his views based on the Wii U's performance. IMO the development of the Wii-U was a reaction to what I call "tablet panick." As a result, Nintendo introduced a very weak console with a horrible controller/tablet hybrid that is neither a great controller, nor a great tablet. Plus they don't have the gimmick factor that the Wii had with the new control scheme. Everyone is under this impression that tablets and smart phones are a threat to consoles and I think that is such BS! They are completely different products that bring completely different experiences. No one buys 60" plasmas to play Angry Birds! Likewise, no one wants to play Skyrim on a tablet! The reasons console sales have been in decline are because A.) This current generation saw console sales reach over 250 MILLION! There is such a thing as "critical mass" and the market is saturated. Pretty much everyone that wanted a console this generation has one! B.) This generation is 7+ years in the making. That is well beyond the typical 5 year cycle with new generations.

I guarantee you that once the PS4 and Xbox Fusion are out, this whole cycle will begin again and the industry will be on the upswing.

[4lc4pon3]

I can see his concerns but I believe this is going to be the best and biggest bunch of years ever in gaming. The PS4/Fusion are going to sell like hotcakes. Activision just better get on the ball with COD and do something new rather then milking it to death

[Holeran]

Anyone actually thinking that next gen consoles are competing with tablets and smart phones is sadly mistaken. I have 2 tablets and 2 smart phones and the only time I ever play on any of them is when I am not home.

[Th3 Chr0nic]

activision doesnt care about them competing in the same terms a gamer would consider competition. all activision sees is money going towards something other than their product and that is enuff to deem it competition in their eyes. you and me see games and some games that are low quality and some that are high quality, but to activision they see Dollars and thats it. to them a low quality title and a high quality title are the same cause all they see is the pricetag and potential profit.

[kevnb]

way things are going its going to be a tablet and pc world, and piracy will be impossible thanks to big brother like restrictions we already see in all other media besides the internet.

[TheFamous1]

More like using this as an excuse because Call of Duty is old and tired and World of Warcraft is on a decline.. two HUGE money makers for them.

[sarshelyam]

What are you blind Bobby? Stop generalizing. There is NO question as to Sony's First Party support as evidenced by the February unveil, and we all know more is on the way. You may be concerned about Microsoft, and that's fine...but get your facts straight you douche!

[ufo8mycat]

Competing with tablets? LOL Wrong audience. tablets are focusing on casual people.

PS4 at least is focusing on CORE gaming. Different market.

[Crazay]

I hear what he's saying about phones and tablets but I just can't bring myself to think of them as proper or even viable options for gaming at this time. I love my 92" home theater for gaming and don't want to use my phone or tablet for actual games. Sure I use them for stupid things to kill a few minutes here and there but that's it for my mobile gaming.

[ger2396]

I think that's code for, cod might not sell aswell as previous years.

[MadMen]

Who cares what bobby and his company thing.

Tell me when COD actually look and plays different after 30 versions.

Tight.

[Sykoticz]

I dont think Activision should say anything. Maybe they are mad because they have to make a new Engine for the next COD?

[mediate-this]

the gaming industry is alive and well. consoles and tablet/phones are a different market. this generation sold more consoles then the last generation, tht tells me the console market is alive and well.

game cube sold 21mil
xbox 1 sold 24 mil
ps2 sold 150mil

compared to ps3 and 360 at 140plus mil
wii at around 90 mil

using the wii u as a base for this is ridiculous, there are no games for that system, I think the wii u wll sell around 25 to 30 mil.

I think more people will adopt the p24 and 720

quote on me that

[Knightofelemia]

I wouldn't mind if Activision put away their crystal ball and start making some games other games besides COD. Like another Xmen Legends, Marvel Ultimate Alliance, or a new Transformers title from High Moon sudios.

[thesoftware730]

What he says about uncertainty concerning price is the biggest factor. Sony can learn from past mistakes, but they have a habit to price their products kind of high due to the great quality they provide. They seem to do better over the long haul rather than right out the gate recently.

Microsoft might decide to include a Kinetic in every box which could drive the system cost up. On top of having to pay for Gold that could turn off a few people from the system.

A Nintendo Wii U price cut might also affect the systems.

Don't get me wrong i believe the systems will do well, but the following months out the gate might be difficult.