Video game publisher Activision is doing just fine, thanks to “Guitar Hero”, but CEO Bobby Kotick says Sony and Microsoft are going to have offer steep discounts on their game consoles if they want to succeed.
Kotick says both Microsoft’s (MSFT) Xbox 360 and Sony’s (SNE) PS3 will have to retail for $200 within the next two years if they’re going to become mass-market successes — or at least keep up with Nintendo’s low-priced Wii.
“The Wii at its price point is now setting a standard and an expectation, and people say, well, the Wii is less complex technically. I don’t think that really matters as much to the consumer,” Kotick told the Reuters Media Summit in New York.
Could it happen? Maybe. Console prices always decrease over time, and console makers make their money off of game software, not the hardware. Microsoft would only need to lop off $80 from its new Xbox to get to Kotick’s magic number. But Sony would have to cut the PS3 price in half to get there, and it’s just grudgingly cut prices after slow sales.