NEWS - Wednesday, April 24, 2002
Activision Likes Console Price CutsLOS ANGELES - The chief executive of video game maker Activision Inc. was surprised by two recent European price cuts for game consoles by Microsoft and Nintendo, but said on Tuesday that the moves could boost games sales. At the Milken Institutes annual conference in Beverly Hills, Activision CEO Bobby Kotick also said Activision is not interested in merging with a major media company, preferring its own growth strategy. Speaking on a panel of major media executives at the conference, Kotick said: "Im trying to figure out why I was invited -- these guys are all in slow-growth businesses and we are trying to maintain our (strong) growth." Analysts have said Activision, the No. 2 publisher in terms of market capitalization, is benefiting, like competitors, from the early part of a multi-year growth cycle, spurred by competition from three advanced video game consoles. Kotick told Reuters last weeks price cut for Microsoft Corp.s Xbox and this weeks cut for Nintendo Co. Ltd.s GameCube were unexpected. "I dont know if its a positive for our numbers but I see it as a catalyst for increased hardware sales, which will hopefully increase soft sales," he said. Kotick said he thought a price cut for the GameCube in the U.S. was unlikely this year, though he expected cuts by year-end for the Xbox and Sony Corp.s PlayStation 2. The Xbox and PS2 retail for $299, while GameCube retails for $199. All three consoles are less expensive in Europe, on a dollar basis, than they are in the U.S. Asked about any surprises in the new console cycle, he said in part, "We continue to be surprised at how good hardware companies are doing at building relationships with third parties. This is a big change from five years ago."