Rebuttal to the Destructoid article

For anyone who's interested, here's a rebuttal.

http://playstationlifestyle.net/2009/07/14/sony-flame-baiting-is-so-2007/

Valid response to criticism or desperate fanboyism?

BTW, I'm just doing this to show I'm not all about PS3 doom and gloom.

Jim Sterling's trolling ability is god-like.

It was kind of obvious from the beggining, the only reason Destructoid are still around is because of their flamebait which people sadly get in a huff over so easily.

What I found funny from the other thread were the people who claimed that Activision could drop Sony and still do very well. I wonder how the hell Activision would explain that to their shareholders: "Yeah, guys...we are going to stop supporting the PS3/PS2 even though doing so has been completely beneficial to us and we have made tons of money from it." I dont care how much money Activision makes, they would have a hell of a hard time convincing stock holders to throw money away.II_Seraphim_II

Really? Was that it? I was expecting a bit more than a couple of short paragraphs.

Although Destructoid's tirade was overly harsh, some of his points do ring true. He didn't even touch on other niggles I have with the system.

But whatever. This is just more internet noise in response to other internet noise.

[QUOTE="II_Seraphim_II"]What I found funny from the other thread were the people who claimed that Activision could drop Sony and still do very well. I wonder how the hell Activision would explain that to their shareholders: "Yeah, guys...we are going to stop supporting the PS3/PS2 even though doing so has been completely beneficial to us and we have made tons of money from it." I dont care how much money Activision makes, they would have a hell of a hard time convincing stock holders to throw money away.blue_hazy_basic

What I found funny from the other thread were the people who claimed that Activision could drop Sony and still do very well. I wonder how the hell Activision would explain that to their shareholders: "Yeah, guys...we are going to stop supporting the PS3/PS2 even though doing so has been completely beneficial to us and we have made tons of money from it." I dont care how much money Activision makes, they would have a hell of a hard time convincing stock holders to throw money away.II_Seraphim_II

But you're forgetting the substantial costs put into those Playstation games would be available for other projects -- instead of spending millions on PS2 and PS3 versions of games, Activision can finance new IPs (like the one that rhymes with "Brutal Legend") or put that money towards purchasing a new license/developer (the obvious answer being either to create an "Activision Sports" brand or to purchase Take 2/2K/2K Sports). If the cost/sales ratio on Playstation platforms really is as bad as Activision is making it out to be, then it stands to reason that the smart business move would be to focus on the more profit-friendly 360 and Wii.

[QUOTE="blue_hazy_basic"][QUOTE="II_Seraphim_II"]What I found funny from the other thread were the people who claimed that Activision could drop Sony and still do very well. I wonder how the hell Activision would explain that to their shareholders: "Yeah, guys...we are going to stop supporting the PS3/PS2 even though doing so has been completely beneficial to us and we have made tons of money from it." I dont care how much money Activision makes, they would have a hell of a hard time convincing stock holders to throw money away.II_Seraphim_II

Without getting into a big debate about this. Revenue =/= Net Income. You can lower your revenue and still make a higher net income in the process. This is basic accounting. Now whether Activision doing this is smart isanother issue but lets not confuse the 2.

[QUOTE="II_Seraphim_II"][QUOTE="blue_hazy_basic"] I wonder how anyone makes money with exclusives! At the end of the day Activision pay Sony a ton of money in fees. They would lose some money from PS owners, but people who own more than 1 console would simply buy the games on the wii/xbox or PC (and we all know cows have sweet gaming PC's) so they really wouldn't be losing a **** ton.ActicEdge

Without getting into a big debate about this. Revenue =/= Net Income. You can lower your revenue and still make a higher net income in the process. This is basic accounting. Now whether Activision doing this is smart isanother issue but lets not confuse the 2.

[QUOTE="ActicEdge"]

[QUOTE="II_Seraphim_II"] You are not understanding what I'm saying. As things stand, Sony is making them money (according to the above article, its 40% of their revenue). Now even if they do make close a billion dollars monthly from WoW, how on earth, does dropping 40% of your revenue stream help your stock holders? Do you think the stockholders will say "yeah, we want to make less money!" Even if Activision is still turning a hefty profit its still LESS than they would make by supporting Sony. And as you know, you can never have too much money. Its like if you pay a person 10million dollars a year. Then you say "ok, we are changing it to 9million annually." Sure its still alot, but he will complain, because 10 is more. Same applies here. Activision would survive without Sony, but their income would be less than if they supported Sony, and shareholders know that.II_Seraphim_II

Without getting into a big debate about this. Revenue =/= Net Income. You can lower your revenue and still make a higher net income in the process. This is basic accounting. Now whether Activision doing this is smart isanother issue but lets not confuse the 2.

[QUOTE="ActicEdge"]

[QUOTE="II_Seraphim_II"] You are not understanding what I'm saying. As things stand, Sony is making them money (according to the above article, its 40% of their revenue). Now even if they do make close a billion dollars monthly from WoW, how on earth, does dropping 40% of your revenue stream help your stock holders? Do you think the stockholders will say "yeah, we want to make less money!" Even if Activision is still turning a hefty profit its still LESS than they would make by supporting Sony. And as you know, you can never have too much money. Its like if you pay a person 10million dollars a year. Then you say "ok, we are changing it to 9million annually." Sure its still alot, but he will complain, because 10 is more. Same applies here. Activision would survive without Sony, but their income would be less than if they supported Sony, and shareholders know that.II_Seraphim_II

Without getting into a big debate about this. Revenue =/= Net Income. You can lower your revenue and still make a higher net income in the process. This is basic accounting. Now whether Activision doing this is smart isanother issue but lets not confuse the 2.

And I'm saying that assuming that they will automatically lose 40% revenue is incorrect. That's not how it works. SW has this habit of thinking that numbers can only be analyzed in basic smple ways and basic statements are enough to make a point. With my basic grade 11 accounting skills I can already see a bunch of holes in your analysis. Before I explain let me get this out of the way and say, Activision is talking **** and will not drop Sony support.

If Activision was to drop Sony support and according to what they said, this is how I would look at it. The Playstation brand is causiing them to lose more money than they make off of it. As such it would be fair to assume that A) the platstation brand is the brand that makes them the least amount of money per unit or is causing them to lose large quantities of money until a significant amount of units are sold or B) Activision see dropping Sony Soupport as a way to venture out and try new territories that could make them more money than currently supporting Sony.

If A is the case then it would be fair to conclude Activision may see the amount of money per unit they make off of the other systems as a greater gain than what they made or lost with Sony. For you to say Activision loses an automatic 40% of there revenue through cutting Sony support is incorrect. The idea is that the amount of total units sold for a specific piece of software/peripheral by Act would decrease but not by an automatic 40%, because that is under the assumption that the buyers of the 40% revenue will not pick up said software/peripherals on other systems. This would absolutely be the case so the drop in revenue will not be 40%, it will be lower than that. How much lower is something we don't know however. It could be 35 or 20 etc. However, if the amount of net income Activision makes per unit on the other systems is high ennough, they could petentially increase their net income while reducing costs due to porting making an even bigger increase in money produced. Thus even with a lower revenue, Activision could make much more mmoney financially which is a big part of business for them, actually it is the biggest. In short, less sony support could equal more net income with less costs though revenues would most definitely be lower.

If B is the issue then there is really nothing to discuss because Activision would see new ventures worth more than PS3/PSP support. Don't really have anything to analyze there lol. On top of this, if what Activision said about royalties to Sony is true then dropping PS3 support just to avoid the massive royalty fees may be a tempting venture.

As for the Destructoid article, it didn't need a rebuttle because it was a stupid article that shouldn't have been take seriously to begin with.

[QUOTE="ActicEdge"]

[QUOTE="II_Seraphim_II"] You are not understanding what I'm saying. As things stand, Sony is making them money (according to the above article, its 40% of their revenue). Now even if they do make close a billion dollars monthly from WoW, how on earth, does dropping 40% of your revenue stream help your stock holders? Do you think the stockholders will say "yeah, we want to make less money!" Even if Activision is still turning a hefty profit its still LESS than they would make by supporting Sony. And as you know, you can never have too much money. Its like if you pay a person 10million dollars a year. Then you say "ok, we are changing it to 9million annually." Sure its still alot, but he will complain, because 10 is more. Same applies here. Activision would survive without Sony, but their income would be less than if they supported Sony, and shareholders know that.II_Seraphim_II

Without getting into a big debate about this. Revenue =/= Net Income. You can lower your revenue and still make a higher net income in the process. This is basic accounting. Now whether Activision doing this is smart isanother issue but lets not confuse the 2.

What does the PS2 have to do with this? Why is the rebuttal hiding behind the PS2? Particularly since the PS2 is not the problem (from Activision's perspective) and since PS2 revenue is going to plummet anyway due to the inevitable decline of that platform.

So, it is 18% of console revenue and 8% of total revenue.

And we have no idea of the cost. Ergo, we have no idea if one red cent is made by PS3 titles.

What we do know is that Wii revenue is 1.7 times PS3 revenue.

And we know that 360 revenue is 1.5 times PS3 revenue.

And we know that Wii development is much much cheaper than PS3 development.

And we suspect that 360 development is a fair amount cheaper than PS3 development.

Without knowing cost allocations, it is safe to say that the Wii is wildly more profitable and the 360 is considerably more profitable.

The choice then is where to put your limited money? There is a reason that MW2 appears to be coming to the Wii.