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PlayStation 3 Case – Planning and Strategy Essay

There is very little Sony can do to turn around the sales of the PlayStation 3. It has been nearly six years since its launch, the full lifetime of most gaming consoles. While the Nintendo Wii and Micrsoft Xbox360 have drastically lowered their prices to move existing stock, Sony has only dropped their price in the last 2 years. Now priced at $300, the PS3 is still over $100 more expensive than the competitors. At this point in time, it would be wise for Sony to discontinue the manufacture the sale of the PS3 and focus on its next game console.

Sony’s strategic approach to new product development has always been to be a market leader in new, innovative technology. This approach has brought them huge success, but also some notable failures. For instance, the Sony Betamax, which was introduced in 1975, was supposed to be a direct competitor to VHS. It provided higher quality images, but did not offer the longer playtime of VHS. Sony stubbornly refused to change its format for eight years, but eventually switched over to the far more popular and cheaper VHS.

Despite this notable failure, the Sony Walkman was one of its greatest successes, with 100 million units sold within its first decade. The key success factors in the video gaming industry today are content, price, availability, and compatibility. These have remained factors since consoles first began emerging in the late 70s. For gamers around the world “Content is King. ” It doesn’t matter how crisp and beautiful the quality of the images if there are only fifteen games, which, coincidently was the number of games with which the PS3 launched.

Gamers who rushed out to buy the PS3 quickly realized that the limited number of games made the PS3 little more than an expensive TV attachment. Sony tried to counter this by touting the Blu-Ray capability of the PS3, but gamers weren’t interested in watching movies on their PS3, they wanted to play new games. Another factor in the success in video gaming is the price. At $600, the PS3 was, and still is, the most expensive gaming console ever sold. While the original PlayStation and the PS2 were priced at $299, the PS3 nearly priced itself out of the market.

With the Xbox and Wii selling for around $300, the ludicrously expensive PS3 couldn’t possibly hope to live up to the expectations its price was promising. When gamers realized that the PS3 was not better than the Xbox in gaming quality, they quickly rushed back to stores to return them. By 2007, more PS3s were being returned than were being sold. The last two factors in video gaming success, availability and compatibility, are also weaknesses in the launch of the PS3. Initially Sony planning on manufacturing one million consoles.

On November 7, 2006, North American retailers had fewer than 200,000 units. By the time retailers had enough units to meet demand; gamers had begun to return their units at an alarming rate. With compatibility, the PS3 initially promised backwards compatibility with the PS2 games. This seemed to vary per unit, with some units, like the upgraded unit being able to play Sony Platform games like Final Fantasy, but the base model not being able to play any PS2 games. The launch of the PS3 was one of the largest in video gaming history.

Sony spent over $150 million in advertising that aimed to convince gamers to hold off purchasing an Xbox 360 and wait for the PS3. IN 2006, they developed the slogan “Play Beyond” for the Electronic Entertaiment Expo . Unfortunately, people soon because spoofing the slogan and replacing it with “Pay Beyond,” protesting the high cost of the console. The competitive advantage of the PS3 was supposed to be in its superior gaming quality. IT was supposed to be the most advanced, the most practical and the most visually stunning video game platform in history.

The PS3 promised free online play, Blu-Ray capability, online surfing ability, and using the PS3 for pictures, videos and music storage. The weaknesses in the PlayStation3 were numerous. There were only 15 games available initially, of which, only about five were interesting to avid gamers. The video quality was equal to the much cheaper Xbox360. The free online play had limited and fairly useless content. The online surfing was cumbersome and useless for users who already owned computers. This was also true of the music, video, and picture storage, which customers could already use on their computers or even their iPods.

With their limited initial availability, and spotty backwards compatibility, the PS3 was too much money for too little content. When compared with the marketing program of the Nintendo Wii, the PS3 seemed to target the avid gamer. Traditionally men aged 15-35; these men were interested in serious gaming. They want high quality content and high quality visuals. The Nintendo Wii chose another market, the family. While the PS3 touted its amazing video quality, the Wii emphasized fun and togetherness.

They offered fun games for multiple players of all ages who could enjoy the physical activity of using the Wii controller. They put of silly, colorful, low-resolution games at a reasonable price or bundled in with new Wii consoles. Nintendo also had the advantage of two major game legacies, Mario and Zelda, which had been favorites of serious gamers and children alike. While Wii was selling fun, the PS3 was selling serious. Families were much more willing to buy a Wii that the whole family could use for less than $400, than spend over $600 on a gaming system that did not offer a range of games for all ages.


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