Sony Playstation 3: Game Over?

Sony PlayStation 3: Game Over?

Main issues related to the disappointing launch performance of PS3 in November 2006, are the following topics:

a)High launch prices in comparison to the main competitors and overestimation of the high technological standard as a differential;

PS3 had launch prices that were at least 25% higher than it's main competitors, and although it's has an innovative technology pattern (revolutionary hardware platform of cell ship and Blu-ray disc player), a great amount of the potential consumers probably didn't recognize that it was worthwhile. So that, one year after the launch, when Sony decided to cut down their prices, it has resulted in a considerable increase in sales. If they had done this previously, they could have got earlier the breakeven of the high investment by having a higher volume in sales and also a more accelerated adoption of the new console plus accessories and games. In my opinion, Sony should have done a market research before launch, in order to evaluate which would be the highest price their target consumers would afford for the innovative console.

b) Lack of promotional programs; could have used more the Blu-ray technology at as a key differentiator;

When Sony decided to do some promotional programs, in my opinion it was too late. If they had done it previously, probably the PS3 adoption would more rapidly accelerate. They could have used the actual convergence in content between video games and movies (like they used for PS2 - spider man 2) to "co-promote" not only the new game technology but also the Blu-ray player by developing a game, which would correspond to some potential blockbuster film that was about to be launched. For example, people could get the game and the film as a gift if they buy the more expensive version of PS3.

c)Dearth of PS game titles available and it's high prices;

Worldwide sales of video games titles were projected to more than double between 2004-2008. Sony has developed only 38 new games for PS3, while Microsoft created 47 for Xbox 360 and Nintendo 86 for Wii. PS3 games prices were also slightly higher than if main competitors: $59.99 (PS3) versus 19,99 to 59,99 (Wii/Xbox). So that, PS3 users would have to pay more for the console and for the games, and controversially would have less games options than Wii or Xbox.

d) Sony didn't focused in their target consumer needs;

Sony has developed PS3 by pushing to converge several different hardware devices into a single device for the living room, in the way that they lost a little bit the focus on it's main consumer needs, which were supposed to be more interested in the game experience