Activision CEO Bobby Kotick has said that his company may have to stop supporting the PlayStation 3 if Sony does not drop the price of the luxury console.
"They have to cut the price, because if they don't, the attach rates [the number of games each console owner buys] are likely to slow. If we are being realistic, we might have to stop supporting Sony," said Kotick to The Times.
"When we look at 2010 and 2011, we might want to consider if we support the console and the PSP [portable] too."
According to the report, Activision paid USD 500 million in royalties to Sony last year which, "probably still worked out at 400 per cent of the profit they made".
He added: "I'm getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they don't make it easy for me to support the platform.
"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."
Big releases from Activision this year include a reinvigorated Tony Hawk title complete with peripheral, DJ Hero, the latest spin-off of the popular Guitar Hero franchise, and Call of Duty: Modern Warfare 2, which Activision expects to be the "biggest entertainment launch of all time".