Activision: Why Abandoning the PSP and PS3 Would Be a Mistake

Activision is threatening to drop support for the PSP and Playstation 3 in the near future. The biggest third-party video game publisher in the world is disappointed by the low hardware sales for the Playstation 3 and low software sales for the PSP. They simply don't think it is with the effort of developing for the two Sony systems due to the low return of investment. Activision will be making a huge mistake, however, by abandoning both the PSP and Playstation 3. Here are a few reasons why it would be a blunder.

Market Share
While the PSP is a distant second to the Nintendo DS and the Playstation 3 is in last place in the home console market against the Nintendo Wii and Xbox 360, Activision would still be missing a sizeable chunk of the market by abandoning both systems. For a big third-party company, Activision needs to release their games on to as much video game systems as possible. This is especially important if they want to stay as the biggest third-party publisher in the entire gaming industry.

History
Activision wouldn't be where they are today without the help of the Playstation. Two of their most recognizable video game franchises, Tony Hawk and Guitar Hero, became popular on the Playstation and Playstation 2. The Call of Duty franchise is also popular on the Playstation 2 and Playstation 3. Therefore, Activision would be leaving a majority of their fan base by abandoning the PSP and Playstation 3.

PSP Go
While the PSP may have a strong 50 million user base, the software sales has been lackluster. Coming this fall, the PSP Go will not only rejuvenate the handheld system, it is also features digital distribution. This is important for publishers like Activision as it prevents piracy, rentals and used copies. So instead of abandoning the PSP, Activision should be gearing up for more support for the handheld.

Playstation 3 Slim
Also coming this fall is the slim line version of the Playstation 3. The new model will not only signal a re-launch of the Playstation 3, it would also result in a price drop. Publishers like Activision will benefit from the rapidly growing user base of new Playstation 3 users that will result from the launch of the slim line version of the Playstation 3.

Price Cuts
Finally, many publishers would agree that both the PSP and Playstation 3 need price drops. Those will come eventually down the road. In fact, it is pretty impressive how well the PSP (at 50 million) and the Playstation 3 (at 23 million) have done with the high price tags.

Because of these factors, it would make no sense for Activision to abandon the PSP and Playstation 3.