Activision's CEO verbalizes the uncertainties surrounding the next-generation consoles and consumer reaction.
There's certainly a lot riding on Sony and Microsoft in 2013. The gaming industry has been waiting for the arrival of the next generation for quite a while, fearing another industry crash, as seen in the early 1980s, if new products weren't revealed soon. The Nintendo Wii U beat them both to the punch, but has suffered lackluster sales since the beginning of the year.
Earlier this month Nintendo, blamed the slow Wii U adoption on customer confusion and a lack of premium first-party games. But is that indeed the case? Or has the global economy taken such a beating that customers just aren't willing to spend big bucks on an entertainment device that can't be used on the go? Tablets are selling like hotcakes, especially the smaller sizes, and these provide cheap but quality gaming the big three have yet to really harness.
“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," said Activision CEO Bobby Kotick.
Not only are next-gen consoles competing with each other and mobile devices, but a wave of Android consoles are set to arrive in June like the OUYA and Nvidia's Project Shield. Throw in the fact that customers can purchase a high performance desktop or notebook at a low price – and they do more than just play games, movies and TV shows – and there's a wider arena than just the Big Three duking it out at Walmart. It's a different playing field than it was three or four years ago.
Kotick, who spoke during the company's recent Q1 2013 Earning conference call, hinted that Microsoft and Sony will likely face the same challenges as Nintendo has faced since the Holiday 2012 season. So far the back half of 2013 looks more "challenging" than previously expected.
"While we have had a solid start to the year, we now believe that the risks and uncertainties in the back half of 2013 are more challenging than our earlier view, especially in the holiday quarter," said Kotick. "The shift in release dates of competing products, the disappointing launch of the Wii U, uncertainties regarding next-generation hardware, and subscriber declines in our World of Warcraft business all raise concerns, as do continued challenges in the global economy."
Because of this, Activision will remain cautious. "The newest console, the Wii U, has had a very slow start,” Kotick added later. "All of these factors further heighten our concerns heading into the back half of the year, particularly during the very competitive fourth quarter."
It's undoubtedly a scary year for publishers and developers who must sit back and see how consumers react and what they will eventually do towards the end of the year, and into 1Q 2014. Sure, customers will eat up the new consoles during the holiday season, but will sales sizzle out come January 2014?
More conference call coverage can be read here. Hopefully we'll have a better angle on what's to come next month during E3 2013.