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As sales sag, Activision hints it could quit making games for Sony

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(Read caption) The Activision booth on the closing day of E3.

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Sony, you just got served.

In an interview that's sending tremors through the ailing video game industry, the head of the world's largest third-party game manufacturer, Activision Blizzard, said the company might stop creating products for Sony consoles. Robert Kotick, Activision's CEO, told reporter Dan Sabbagh that Sony had to cut its price on products such as the PlayStation3, a high-powered machine which retails for upwards of $400.

The Nintendo Wii, by comparison, sells for $250.

"The PlayStation 3 is losing a bit of momentum and they don’t make it easy for me to support the platform," Kotick said. "It’s expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation… If we are being realistic, we might have to stop supporting Sony."

Bad news all around

The video game industry has weathered slumping sales over recent months, although Sony has been hit especially hard. Some critics identify the problem as one of market: while the Wii is snapped up consistently by casual gamers, Sony continued to target the smaller circle of hardcore fans. And the big price tag on the PS3 may be too steep for many consumers, especially at a time of recession.

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