Microsoft has to prove Xbox One's premium price is worth it

Eric Hirshberg talks to us about next-gen, how consoles will continue to be a stable market, and why ATVI is very careful with investments in mobile
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Headquartered in Santa Monica, California, Activision Blizzard, Inc. is a worldwide pure-play online...
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Activision Blizzard is sitting pretty. While some have struggled in this extra long console cycle, Activision is the only publisher that's consistently seen its revenues and net income increase each year. It's a testament to the strength of core brands like Call of Duty, Skylanders and World of Warcraft, but it also speaks to a very careful and deliberate strategy from management.
It's this same strategy that often yields the company much criticism from some industry pundits. While rival publishers like EA are making substantial investments in digital and mobile, Activision has been dipping its toes, rather than fully diving in. In a recent phone interview with GamesIndustry International, Activision Publishing boss Eric Hirshberg noted that many "misinterpret" his company's very careful approach to mean that it's not interested in other growing markets like mobile. At the same time, he stressed the continued importance of the console sector, and gave his frank opinion that Microsoft will have much work to do in convincing consumers that $499 with a Kinect bundled in will be worth the investment.
The full interview below also goes into detail on the massive investment in Call of Duty: Ghosts, Bungie's Destiny, and how games have become "the entertainment medium of choice for a generation."
Q: As a publisher, does the $499 price point on Xbox One concern you?
It's up to them to win the value argument. If you do a focus group of a gazillion people and you show them two prices for two competitive products, 100 percent always prefer the lower price. I think from a first impression standpoint the win goes to Sony, at least as it relates to pricing. Microsoft is going to have to win the hearts and minds and convince people that the higher price point is worth it, and that it provides really meaningful capabilities that will be meaningful to consumers. And it's a long game, so I am sure that's what they intend on trying to do.
Q: One of the reasons for that higher price point is that they're packing in the new Kinect whereas in PS4 the PS Eye is sold separately. You guys have some good studios working on some high quality products. Does the inclusion of Kinect appeal to you? Will it make a difference in the long run to that platform?
I think it's the same answer; I feel they have to show why that's a good thing and why it's worth the premium and deserves inclusion and why it's something that gamers are going to come to really value and appreciate. … It's going to be a fun battle to watch, but I think they definitely have to win hearts and minds in terms of the value of it.
Q: When you look at the Wii U, does its sales level change the way you think about that platform is a publisher? You guys have always been a bit slower to jump on new platforms compared to a publisher like Ubisoft.
"We're in the business of blowing minds and providing huge experiences. It's a critical year and it's a critical transition, and we're going to spare no expense to make sure that we have the best game"

I don't think we're slower to move; we're a very choiceful company. We're very choiceful in the number of titles we make. We scrutinize opportunities very carefully, and when we go into them we go big. And I think that's been part of the formula for our success. We were there with a lot support for the Wii U at launch with a Call of Duty game, with a Skylanders game and with several other titles. We want to see Nintendo be successful and we want to do anything we can to help them be successful. Obviously the Wii U is struggling - that's not a secret, I don't think there's any other way to read the narrative right now - but they're a really good company and they've got some incredible IP that has yet to come, that they honed for that platform. We have a vested interest in making them successful.
Q: With the Call of Duty it seems like every year the stakes get higher. Is it fair to say that this year will be the biggest investment ever in Call of Duty?
I think that's a fair deduction. We don't talk about our budgets but we're developing for [many] different platforms with next-gen and current-gen and it's a very complex development process. And then you have all the stakes that come with a new generation of hardware, the expectations, needing to set the gold standard for next-gen, win people over and make sure that our audience comes with us to the next generation. Look, it's not for the faint of heart. When you're on top you've got the rest of the industry gunning for you - excuse the pun - and you also have the toughest competition of all which is ourselves and our past success and exceeding our gamers' expectations.

http://www.gamesindustry.biz/article...ce-is-worth-it