Not surprising, and I can't disagree with him. "Businessman decides to stick to most profitable market."
I notice a lot of people groaning over lack of innovation, look at the companies he controls; particularly Blizzard Entertainment. Blizzard has openly stated that they prize polish (execution) over innovation (see ref. 1), and look where it's gotten them. Blizzard has World of Warcraft, which rakes in almost unbelieveable amounts of cash mostly because it's the most polished and has years of balance tweaking. Also see the Starcraft series: innovative? Not particularly, but these games have unbelieveable fanbases the world 'round. Why? Again, because they will spend year after year balancing, and combined with a slight stroke of luck, it let them transform their RTS into an E-sport. Hell, even their Warcraft RTS series has a good competetive base around it.
Activision's games are on the Pareto frontier (see ref. 2), and Kotick knows it. Why the hell would he put the company's money on the line for a less profitable venture? That's not good business.
Reference 1: http://kotaku.com/5031694/blizzard-execution-over-innovation
Reference 2: http://achrongame.com/site/blog-main.php
(For Ref. 2, go to the article titled "Indie Vs. Goliath". It has a good explanation of the Pareto Frontier. Also, really cool innovative game!)