Kotick: Console Makers Need to Slash Prices

Speaking to British paper Times Online, Activision's head honcho Bobby Kotick acknowledged that games are gaining wider and wider appeal, but he also noted that pricing (particularly with hardware) is a barrier to entry.

"There is a real demographic expansion which we had always hoped for," he said. "There's now going to be a rivalry between feature films and computer games. We are not there yet, but it will happen - there will be a narrative. The physical appearance of the game has changed, which is attracting new people, and there is a real sense of a social game. With the internet, people on different sides of the world can play against each other. People who had never before played a video game are picking one up now."

Of course, in addition to the Wii, music games such as Activision's own Guitar Hero franchise and MTV Games' Rock Band are helping to fuel this phenomenon. You might not be a gamer, but odds are at one point or another you've picked up a guitar controller. The problem, says Kotick, is that the hardware needed to play the games is selling for too much.

"It used to be the case that we did well during slowdowns because if you couldn't afford to go to the movies or to travel to a theme park, you stayed home and played a computer game. But now I think that the hardware manufacturers are going to have to think about reducing their prices because the cost of purchasing some of this stuff is prohibitive," he said.

If the rumors are right, then Kotick may get his wish, for the Xbox 360 at least. With the Wii still selling very well at $249 it's unlikely Nintendo will budge, and Sony for the moment is too focused on profitability so they probably will not react to a 360 price drop either.