Sony Playstation 3 Case
September the 26th 2012
Case Analysis: Sony Playstation 3
1. What, if anything, should Sony do to turn around the sales of the PS3? * Instead of focusing on one particular target segment (18 to 35 year-old male gamers with above average-education and high degree of comfort with new technology) further target segments should also be focused (e.g. women, children, occasional gamers and non-gamers). Some of the further customers require games which are easy to play because they have a low degree of comfort with new technologies. Furthermore some of them don’t want to invest a significant amount of their time to learn and play these games because of their busy lives. * Supply simpler games irrespective of age, gender or gaming experience. This could lead Sony to two advantages: 1. Larger number of potential customers 2. Lower production costs for the simpler games higher margins * Supply more especially higher ranked PS3 titles to create stronger incentives for customers to buy a PS3 console/ to prefer PS3 over other game consoles * Sell the PS3 in different packages (e.g. 2 controllers and one game included when you buy a PS3) * Introduce a motion-sensing game controller for the PS3 to have similar features like the Wii ( “Playstation Move” already launched in 2009)
2. What has been Sony’s strategic approach with regard to new product development? * Sony supplied usually products with higher quality than the competitors (technical superiority) e.g. Betamax vs. VHS, PS3 vs. Xbox 360 and Nintendo Wii * Sony products were usually significantly more expensive than the products of the competitors e.g. Betamax vs. VHS, PSP vs. Nintendo DS, PS3 vs. Xbox 360 and Nintendo Wii * Sony didn’t adapt its products to the wishes of the consumers e.g. Betamax: Consumers preferred longer recording times over higher definitions but Sony was unwilling to adapt the technology to accommodate longer play times because doing so would
Case Analysis: Sony Playstation 3
1. What, if anything, should Sony do to turn around the sales of the PS3? * Instead of focusing on one particular target segment (18 to 35 year-old male gamers with above average-education and high degree of comfort with new technology) further target segments should also be focused (e.g. women, children, occasional gamers and non-gamers). Some of the further customers require games which are easy to play because they have a low degree of comfort with new technologies. Furthermore some of them don’t want to invest a significant amount of their time to learn and play these games because of their busy lives. * Supply simpler games irrespective of age, gender or gaming experience. This could lead Sony to two advantages: 1. Larger number of potential customers 2. Lower production costs for the simpler games higher margins * Supply more especially higher ranked PS3 titles to create stronger incentives for customers to buy a PS3 console/ to prefer PS3 over other game consoles * Sell the PS3 in different packages (e.g. 2 controllers and one game included when you buy a PS3) * Introduce a motion-sensing game controller for the PS3 to have similar features like the Wii ( “Playstation Move” already launched in 2009)
2. What has been Sony’s strategic approach with regard to new product development? * Sony supplied usually products with higher quality than the competitors (technical superiority) e.g. Betamax vs. VHS, PS3 vs. Xbox 360 and Nintendo Wii * Sony products were usually significantly more expensive than the products of the competitors e.g. Betamax vs. VHS, PSP vs. Nintendo DS, PS3 vs. Xbox 360 and Nintendo Wii * Sony didn’t adapt its products to the wishes of the consumers e.g. Betamax: Consumers preferred longer recording times over higher definitions but Sony was unwilling to adapt the technology to accommodate longer play times because doing so would