Sony PlayStation 3


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Market Research project aimed at looking at the slow growth of Sony\'s playstation 3

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Sony PlayStation 3

  2. 2. SONY<br />TABLE OF CONTENTS:<br />Content-<br />Introduction<br />Industry Trends<br />Industry Competition<br />Internal Company Trends<br />Target Audience Analysis<br />Media Issues<br />SWOT Analysis<br />Product Positioning<br />Recommendations<br />Slide Page-<br />3<br />4-14<br />15-18<br />19-28<br />29-35<br />36-41<br />42-47<br />48-50<br />51-52<br />2<br />
  3. 3. INTRODUCTION: Video Game Market & PlayStation 3<br />SONY<br />In the future the global video gaming market will be driven primarily by online gaming and mobile gaming. While console gaming will continue to be the largest segment, its market share is expected to decline. However, there is a strong growth in the number of casual gamers because the demographic profile of video gamers is changing as the content offered on video game consoles enhances.<br />The Seventh Generation of consoles primarily focuses on the consoles released since 2005<br /><ul><li>Wireless Controllers
  4. 4. Hi-Definition Graphics
  5. 5. Online Network</li></ul>Sony Computer Entertainment launched the PlayStation 3 in the United States in 2006. Despite the fact that the PS3 has arguably the best raw computing power and the Blu-Ray feature in comparison to its competition, it is falling behind in the race for market share.<br /><ul><li>An effective strategy would keep Sony from losing its leading role in the video </li></ul> game industry and our research and presentation offer such a strategy.<br />Source: <br /><br />3<br />
  6. 6. INDUSTRY TRENDS<br />4<br />
  7. 7. INDUSTRY TRENDS: Total Size<br />SONY<br />I. Total Size of Global Video Gaming Market:<br /><ul><li>Expected—Compound Annual Growth Rate of 8.9%over the period 2008-2013 and is expected to reach $76.1 Billion by 2013 </li></ul>II. Total Size of United States Market: <br /><ul><li>2008 reached $21 Billion</li></ul>III. Total Size of Global Video Gaming Console Market: <br /><ul><li>Current— Climbed 11% to $532.7 Million in February 2009 from $481.4 Million in February 2008</li></ul>IV. Total Size of United States Game Console Market:<br /><ul><li>2008 reached $8.9 Billion
  8. 8. The United States accounts for 34.3% of the global market's value</li></ul>Source:<br /><br />5<br />
  9. 9. INDUSTRY TRENDS: Sales<br />SONY<br />I. Game & Virtual World Company Growth: <br /><ul><li>2008 112 companies funding raised $936.8 Million
  10. 10. 2007 62 companies funding raised $618Million </li></ul>II. Game Console Hardware, Software & Accessories:<br /><ul><li>August 2009— $18.1 Billion
  11. 11. August 2008— $21.2 Billion
  12. 12. Sales 18.2% in first 8 months</li></ul>Source:<br /><br />6<br />
  13. 13. INDUSTRY TRENDS: Social<br />SONY<br />Social Game Platforms:<br /><ul><li>Revolves around connecting players in multiplayer matches with access to instant messaging and simple communication methods
  14. 14. Pioneer of social game platforms from seventh generation consoles was Xbox Live in 2005</li></ul>Within the last 5 years Video Game Consoles have improved social gaming platforms:<br /><ul><li>The services allow you to download games, game demos, trailers, TV shows, and movies</li></ul>III. Social gaming is spreading beyond the borders of game platforms:<br /><ul><li>5,000 games on Facebook which has 200 Million users</li></ul>IV. Game Design for a Social Network:<br />Source:<br /><br />7<br />
  15. 15. INDUSTRY TRENDS: Economic<br />SONY<br />Production: <br /><ul><li>Games are interactive, intuitive and realistic more </li></ul> than ever because of the advancement of technology<br /><ul><li>Multiplayer Online Games- Allows you to play </li></ul> with people across the world simultaneously<br /><ul><li>Music Games-</li></ul>Distribution:<br /><ul><li>Game Fly- rent games with no late-fee for $15.95 a month, over 7,000 titles
  16. 16. Over 4,000 GameStop stores around the United States and they offer Trade-In
  17. 17. Distributing games direct to users over the internet, gaming platforms, and downloads</li></ul>Consumption:<br /><ul><li>The gamer is encouraged to become a part of the script
  18. 18. Impacts-Improves dexterity and computer literacy
  19. 19. Impacts-Some studies show violent games lead to an increased level of aggression
  20. 20. Entertainment Software Rating Board (ESRB)- Self-regulatory organization that assigns age and content ratings by enforcing guidelines and ensures online privacy principles </li></ul>Source:<br /><br />8<br />
  21. 21. INDUSTRY TRENDS: Political<br />SONY<br />Entertainment Software Association (ESA):<br /><ul><li>Video Game Voter Network
  22. 22. Exists to empower Americans to take action against threats to the video game entertainment medium
  23. 23. Oppose efforts to regulate the content of entertainment media
  24. 24. Proposals to criminalize the certain sale of video games to minors
  25. 25. Enable gamers to stay educated about issues and contact federal, state, and local officials</li></ul>Family Protection Entertainment Act:<br /><ul><li>Puts government regulation on the sale of violent and sexually explicit video games to minors
  26. 26. Instates federal checks and balances on the ESRB to make sure they are rating appropriately
  27. 27. Investigates instances
  28. 28. Authority to register complaints
  29. 29. Has the right to conduct random, annual audits of retailers</li></ul>Source:<br />9<br />
  30. 30. INDUSTRY TRENDS: Lifestyle<br />SONY<br />Video Games are Addictive:<br /><ul><li>A survey found that 88% of US kids played video games at least occasionally, and on average children play about 13 Hours of video games a week
  31. 31. Those showing signs of addiction could log 26 Hours almost 1:10 kids</li></ul>Interactive:<br /><ul><li>Meet new people through social game platforms
  32. 32. Create Avatar character and live a second life in the social game platform</li></ul>Source:<br />10<br />
  33. 33. INDUSTRY TRENDS: Area of Growth<br />SONY<br />Game Advertising Platform<br /><ul><li>According to Park Associates in-game advertising spending will reach $800 Million by 2012
  34. 34. According to Yankee Group in-game advertising spending will reach $971 Million by 2011</li></ul>Massive Incorporated:<br /><ul><li>Pioneer In-game Advertising Platform
  35. 35. Massive Network enables marketers to reach and engage the millions of young adult males playing games everyday
  36. 36. Advertisers can utilize a broad range of ad units available across titles in the Massive Network
  37. 37. Ad campaigns can be targeted to meet specific geographic needs and timing needs
  38. 38. The dynamic technology allows for creative to be updated and changed as needed</li></ul>How Video Gamers exposed to <br /> In-game Advertising respond:<br />Nielsen Entertainment executed study for Massive in January 2007. Data from surveys with 600+ gamers in North America who played Need For Speed Carbon on Xbox 360 & PC platforms. Game published by Electronic Arts.<br />Source:<br />11<br />
  39. 39. SONY<br />INDUSTRY TRENDS: Area of Growth<br />Source:<br />12<br />
  40. 40. SONY<br />INDUSTRY TRENDS: Seasonal <br />Sales of videogame software and consoles rose 1% year-over-year to $1.28 Billion in September, the monthly rise was the first since February<br />The sales growth, which met expectations, came amid price cuts on the three major videogame consoles--Sony Corp.'s PlayStation 3, Microsoft Corp.'s Xbox 360 and Nintendo Co. Ltd.’s Wii <br />The stronger numbers suggest consumer spending on home entertainment is picking up in time for the crucial holiday shopping season <br />"There's a dark cloud hanging over the industry because of the recession, and people wonder if consumers are going to be there this holiday season," Jesse Divnich, an analyst with research group EEDAR, told Reuters, adding that software holiday sales in the US from October through December could be down 1% compared to last year’s sales.<br />Source:<br /><br />13<br />
  41. 41. SONY<br />INDUSTRY TRENDS: Consumer’s Relationship<br />The consumer’s relationship with the video game industry changed from product to service<br />“We saw was that our customers were really ahead of us in adopting the Internet and seeing the potential that the Internet had for redefining the relationship between content creators and gamers... The new world will be very different.  You will be connecting directly to the customers, sell to them directly,"  – Gabe Newell, Co-founder of Valve Software<br />The social game platform allows for the service and product being offered by the game console to directly reach the consumers they already have and often reward their loyal customers<br /><ul><li>Free Game Downloads
  42. 42. Free Game Upgrades
  43. 43. Free Demos
  44. 44. Promotional Videos for Upcoming Games
  45. 45. Hardware Themes for your Desktop
  46. 46. Digital Magazines with Interactive Content</li></ul>Source:<br />14<br />
  47. 47. INDUSTRY COMPETITION<br />15<br />
  48. 48. SONY<br />INDUSTRY COMPETITION<br />Microsoft Corp.'s (MSFT) Xbox 360 <br />Nintendo Co. Ltd.'s (NTDOY) Wii <br />16<br />
  49. 49. SONY<br />INDUSTRY COMPETITION: Market Shares & Sales<br />PS3 sales fell back 13% this week after the increase last week that was presumably attributable to Uncharted 2.  But the big news is that finally the PS3 is able to show a year on year - year to date increase when compared to 2008 for the first time in 2009.<br />Again this week we see a slight increase in Wii sales, but they are still down to the comparable period in 2008. The Wii still dominates the home console market and indeed this week it outsold the 360 and PS3 combined.  <br />The 360 continues to undersell corresponding 2008 weekly sales by quite a margin and it may fall below the 2008 number soon unless something significant happens to reverse the trend.<br />Source:<br />17<br />
  50. 50. SONY<br />INDUSTRY COMPETITION: Differences<br />Trends in Ad-Spending for Video Game Consoles:<br /><ul><li>New Marketplace— A place with different cost structures and different hardware models 
  51. 51. Software delivery methods change </li></ul>Consoles become truly Multi-Purpose Home Entertainment Platforms <br /><ul><li>Direct delivery (streamed digital content or real-time game play)
  52. 52. Music, movie, digital video recording (DVR)
  53. 53. Gaming enabled devices </li></ul>Source:<br /><br /><br />18<br />
  54. 54. INTERNAL COMPANY TRENDS<br />19<br />
  55. 55. SONY<br />INTERNAL COMPANY TRENDS: PlayStation History<br />1988: In the early years of video games, Nintendo owned the market and had a over-whelming market share. Sony first entered the market in 1988 with a business deal between Nintendo and Sony, where Sony would develop a CD-ROM drive for the Super Nintendo. Through this business deal, Sony acquired the rights to start developing the originally Playstation, called at that time Super Disc. The Super Disc would be able to play both Super Nintendo cartridges, as well as, games developed as CD-ROMS. <br />1991: Sony and Nintendo’s partnership continued to grow, in fact, one of the original “could-be” names for the Playstation was “Nintendo Play Station”. It was during that 1991 that relationships between the two companies began to deteriorate. Nintendo started to resent having to rely on Sony and Sony’s money in order to produce audio chips needed for the Super Nintendo. Sony, however, was drawing on support from their many company affiliates, such as Sony Music and Columbia Pictures to develop new software (other than video games) for the Playstation. Nintendo eventually broke their alliance completed with Sony during 1991 and announced that their company would begin partnering with Phillips (and American company) and Sony’s largest rivals. <br />1992: The first proto-type of the Playstation was dumped after the production of just over 200 consoles. Sony has never given a reason as to why they started production over. <br />1994: December 3, 1994, Sony launched the sales of their first Playstation in Japan, priced at $387 and sold closed to 300,000 units within the first 30 days. <br />1995: September 9, 1995, Sony launched the sale of their Playstation in the United States, priced at $299. There were only 17 games available at this time for the Playstation first generation console. <br />1996: Over 200 games were produced to be played on the Playstation, Sony began the market share holder in the video game industry. <br />1999: Sony made public that they were developing the second generation of the PlayStation, to be called PS2. The newer console would stand upright, have backwards compatibility to play the older games of Playstation, produce better graphics, and play video games in a DVD format. <br />2000: The PS2 was released for sale in Japan, the United States, and Europe at the price of $299. During the opening weekend around the world, the PS2 sold 1 million units. <br />2003: Sony began production on the PS3. <br />2006: The PS3 was released on November 16th with two different models, one model was priced at $500 and the other was priced at $600. <br />2009: Sony announces the release of the new PS3 slim priced at $349; a smaller model of the original PS3. <br />Source:<br />20<br />
  56. 56. INTERNAL COMPANY TRENDS: Current Consoles<br />SONY<br />Playstation3<br />Limited Edition: <br />Uncharted Bundle<br />Playstation3 <br />80GB<br />New Playstation3 <br />250GB Slim<br />New Playstation3 <br />120GB Slim<br /><ul><li> Price: $399.99
  57. 57. In the Box: </li></ul>PlayStation®3 160GB systemDUALSHOCK®3 wireless controllerFree PlayStation®Network membershipAC power cordAV cableUSB cableUncharted: Drake's Fortune™ gamePAIN™ downloadable game voucher<br /><ul><li>Dimensions: 325mm (W) x 98mm (H) x 274mm (D)
  58. 58. Backwards Compatibility: Does not play Playstation 2 games, however, will still play the original Playstation titles.
  59. 59. Price: $299.99
  60. 60. In the Box: </li></ul>PlayStation®3 80GB systemDUALSHOCK®3 wireless controllerFree PlayStation®Network membershipAC power cordAV cableUSB cable<br /><ul><li>Dimensions: 325mm (W) x 98mm (H) x 274mm (D)
  61. 61. Backwards Compatibility: Does not play Playstation 2 games, however, will still play the original Playstation titles.
  62. 62. Price: $299.99
  63. 63. In the Box: </li></ul>PlayStation®3 120GB systemDUALSHOCK®3 wireless controllerFree PlayStation®Network membershipAC power cordAV cableUSB cable<br /><ul><li>Dimensions: 290mm (W) x 65mm (H) x 290mm (D)
  64. 64. Backwards Compatibility: Does not play Playstation 2 games, however, will still play the original Playstation titles.
  65. 65. Price: $349.99
  66. 66. In the Box:</li></ul>PlayStation®3 250GB systemDUALSHOCK®3 wireless controllerFree PlayStation®Network membershipAC power cordAV cableUSB cable<br /><ul><li>Dimensions: 290mm (W) x 65mm (H) x 290mm (D)
  67. 67. Backwards Compatibility: Does not play Playstation 2 games, however, will still play the original Playstation titles. </li></ul>Source:<br />21<br />
  68. 68. INTERNAL COMPANY TRENDS: Brand Positioning<br />SONY<br />“Nearly three years after the device launched and quickly fell behind its two major competitors, Sony is attempting to reposition its Playstation 3 video game console as an all-in-one entertainment device.” Sony’s new advertisement campaign for the PS3 will focus directly on the blue-ray capabilities of the device, as well as, the capabilities of downloading movies directly off the internet onto the PS3.” <br />Late in August of 2009, consumers noticed a vast price cut in the PS3 pricing structure. For the first time in the history of the existence of the PS3, Sony priced the PS3 (not as prestigious pricing) but as competitive pricing. At $299 the PS3 is now in direct competition with the price range of the XBOX 360 and the Nintendo Wii. (The XBOX 360 cost, depending on which make or model of the product, cost anywhere from $199-$299. The Nintendo Wii, on the other hand, is priced at $249.) <br />"We have been a game company for years and we would never walk away from that, but research confirmed there is a larger proposition under our nose," said Peter Dille, senior vice president of marketing for Sony Computer Entertainment America. "We wanted to reposition as a total entertainment solution. We felt like we can really own entertainment.“<br />Sony’s repositioning strategy will now focus on moms and families, an area in the gaming industry that the Nintendo Wii has excelled in gaining a large market share. Sony’s goal is to promote in all-in-one access hub to all entertainment. For instance, Sony is still the only large console on the market that can play blue-ray DVDs, stream live videos over the internet, have a free wireless online network to every consumer who purchases a PS3, and have video game playing capabilities. <br />"A year or two ago, the idea of an all-in-one media hub was kind of a foreign idea among the mass market," Divnich noted. "Today thanks to new technologies like the iPhone, we've warmed up to the idea of products that meet all our multimedia needs."<br />Source:<br />22<br />
  69. 69. SONY<br />INTERNAL COMPANY TRENDS: Repositioning Fall 2009<br /><br /><br /><br />Source:<br />23<br />
  70. 70. INTERNAL COMPANY TRENDS: Exchange Rates<br />SONY<br />It is imperative for one to understand the exchange rates between countries! Due to the fact that Sony is not an American country, you must take note that all monetary value that we discuss during the internal company will be in the form of the YEN and not the DOLLAR. <br />1 USD=90.025 JPY<br />1 JPY= 0.010990 USD<br />Source:<br />24<br />
  71. 71. INTERNAL COMPANY TRENDS: Consolidated Results Forecast<br />Source:<br />25<br />
  72. 72. INTERNAL COMPANY TRENDS: Sales<br />SONY<br />A decline in sales is expected due to the negative impact from the appreciation of the yen and a decrease in sales for the PS2 business. We anticipate that the Game business will continue to record a loss due to the negative impact from the appreciation of the yen and a further decrease in sales of PS2 business despite our expectation that the profitability of the PS3 business will improve due to hardware cost reductions and an enhanced line-up of software titles. <br />Source:<br />26<br />
  73. 73. Internal Trends<br />INTERNAL COMPANY TRENDS: Game<br />SONY<br />Source:<br />27<br />
  74. 74. INTERNAL COMPANY TRENDS: Forecasting for Fiscal Yr.<br />SONY<br />This graph shows that during the fiscal year of 2008, 10.06 million PS3s were sold, this results in a 10% increase of sales from the previous fiscal year when only 9.12 million PS3s were sold.<br />Sony forecasted that they would sale a total of 250 million software units in the fiscal year of 2008, however, in reality Sony only managed to sale 103.7 software in the PS3 division, 50.3 software in the PSP division, and 83.5 software in the PS2 division for a total of 237.5 million software units sold. Sony This means that Sony missed their forecasted sales by 6%. <br />For the fiscal year of 2009 Sony has forecasted that the Sony company will sale 13 million PS3 consoles, 15 PSP hand-held consoles, and 5 PS2 consoles. Similarly Sony has predicted that the Sony company will sale 240 million pieces of software for the fiscal year of 2009. <br />Source:<br />28<br />
  75. 75. TARGET AUDIENCE ANALYSIS<br />29<br />
  76. 76. SONY<br />TARGET AUDIENCE ANALYSIS: Statistics<br /><ul><li>In 2012, the industry predicts 190 Millionhouseholds will own next generation-type consoles
  77. 77. Over 148 Million of these 190 Households will have consoles that connect to the internet
  78. 78. The average age of a video game player is 35 years old and has been playing games for over 13 years
  79. 79. 40% of all gamers are women
  80. 80. From 2003 to 2006, the industry's yearly growth rate grew above 17%
  81. 81. During this time the U.S. Economy grew less than 4% rate
  82. 82. The top 5 states with video gamers are the following: California, Washington, Texas, New York and Massachusetts
  83. 83. Game software sales totaled $6.6 Billion with 153.9 Million units sold in the year 2008
  84. 84. 38% of homes in America have a video game console</li></ul>Source:<br />30<br />
  85. 85. SONY<br />TARGET AUDIENCE ANALYSIS: Customers<br />Sony PlayStation 3:<br /><ul><li>Hardcore Gamers
  86. 86. People who largely devote their leisure time to playing or reading about video games
  87. 87. Practice Games to become skilled players
  88. 88. Customers Enjoy Playing Different Game Genres
  89. 89. Racing
  90. 90. Shooting
  91. 91. Role-playing
  92. 92. The target market is college students who could enjoy the consoles or the portable mini game pieces</li></ul>Source:<br />31<br />
  93. 93. SONY<br />TARGET AUDIENCE ANALYSIS: Women<br />Number of Female Gamers is Increasing <br /><ul><li>Studies show that 40% of average gamers are female </li></ul>Youth College Explorer surveyed 360 people between the ages of 18 to 30 <br /><ul><li>Found that women average 2.7 Hours of gaming a week vs. male counterpart at 2.9 Hours per week
  94. 94. Women are generally viewed as casual gamers</li></ul>Games like Nintendo’s Wii Fitness, Guitar Hero and Pac-Man have been huge hits with the female demographic<br />Source:<br />32<br />
  95. 95. SONY<br />TARGET AUDIENCE ANALYSIS: Women<br /><ul><li>Although this is an industry dominated by males being the main target, the video game industry wants to expand and find other audiences that will increase the bulk of their market. Recent inclinations suggest that a huge portion of their market is female
  96. 96. The video game industry is leaning towards that image of not having a stereotypical gamer of being a male in their late teen years
  97. 97. According to researcher in the industry, James Weaver suggests that women who play video games show signs of depression and poor eating habits in comparison to women who don’t game
  98. 98. Women who were surveyed reported that they play video games to get to relieve stress and tension </li></ul>Source:<br /><br />33<br />
  99. 99. SONY<br />TARGET AUDIENCE ANALYSIS: Males<br /><ul><li>In the video game industry the games are generally developed by and for men. A recent study revealed that 89% of game developers are male, tested by young men and marketed to young men anywhere from the ages of 12 to 39
  100. 100. A male dominated industry
  101. 101. It is reported according to studies put together by a team at Stanford University, that males picked up on the rules of the video game worked quicker than females
  102. 102. Males in college play violent video games more than any other genre of game
  103. 103. Young males are two to three times more likely to become addicted to playing video games than females
  104. 104. Males have a reputation of being known as “hardcore” gamers</li></ul>Source:<br />34<br />
  105. 105. SONY<br />TARGET AUDIENCE ANALYSIS: Potential Audience<br />Research shows that NEW Target Markets with Different Segments have Emerged<br /><ul><li>Women make up 1/3 of game playing market
  106. 106. Target Age shift from 13-17 to 18-35
  107. 107. The NEW potential average age of gamers is 29</li></ul>Source: Peter Lewis.  (2005, June). Not just playing around. Review of medium_being_reviewedtitle_of_work_reviewed_in_italics. Fortune, 151(12), 126-128.  Retrieved November 1, 2009, from ABI/INFORM Global. (Document ID: 850863851).<br />35<br />
  108. 108. MEDIA ISSUES<br />36<br />
  109. 109. SONY<br />MEDIA ISSUES: Integrated Marketing Opportunities<br /><ul><li>Advertising
  110. 110. Sony’s new advertising plan for Europe is set to $134,388,496.78
  111. 111. The 2007 campaign was called: ‘This Is Living,’ using emotions as their key
  112. 112. It since then gone very aggressive with their more conventional 2009 ‘It Only Does Everything’ Campaign
  113. 113. Sales Promotion
  114. 114. There is a mini-site for almost every exclusive PS3 game released or set to be released
  115. 115. In 2008, Sony offered a PlayStation-branded credit card for opportunities of financing. There was a $150 off your PS3 purchase if you signed up for the credit card before the end of December that year
  116. 116. Sony is promoting their price cut to $299 heavily
  117. 117. Public Relations
  118. 118. Sony's response to complaints about the $600 price tag? "It's probably too cheap. As with the PS and PS2, we believe people who like games will, without question, purchase it.” Ken Kutaragi, Sony Computer Entertainment chief, 2006
  119. 119. Sony is working their way up considering they did not live up </li></ul> to the hype on launch. It was not as “revolutionary” and did not <br /> give the “4-d experience” Kataragi promised it would in 2005, <br /> leaving them with broken promises<br />Source:<br /><br /><br /><br />37<br />
  120. 120. SONY<br />MEDIA ISSUES: Media Issues<br /><ul><li>Entitlement- A way to make used games function as inexpensive marketing.
  121. 121. A console would “offer an incentive to a user of a software product when this user shares the product with others, or when the user plays the product.” It is a method of attracting buyers to future games.
  122. 122. Internet Teaser Trailers and Commericals-
  123. 123. Being runned on networks like Cartoon Network, G4, SyFy, and Spike, Sony’s new campaign is capturing audiences through humor.
  124. 124. Blogging
  125. 125. Leaked game specs, new and upcoming buzz about the PS3 causes a frenzy among bloggers in forums and review sites.</li></ul>Source:<br /><br /><br />38<br />
  126. 126. SONY<br />MEDIA ISSUES: Media Vehicles<br /><ul><li>Qore
  127. 127. Give PS3 users early access to game related content at a level of quality, interactivity and depth, such as exclusive news, developer interviews, in-depth game previews and behind-the-scenes looks at PlayStation games, special access to game demos, special beta invitations, game add-ons and other downloadable game-related content
  128. 128. Magazine Ads
  129. 129. According to bloggers, they feel magazines are most effective because “you can actually see a main theme in a picture rather than a 30 second advertisement</li></ul>Source:<br />39<br />
  130. 130. SONY<br />MEDIA ISSUES: Media Issues<br /><ul><li>The best way to expose the PS3 to the public is by the use of television, internet, and magazines. Sony needs to get their message out first before they can be creative with their ads
  131. 131. PS3 needs to spend money on marketing games rather than just the system. Microsoft spent nearly a half billion dollars to create a big enough hype and quantify sales for Halo 3</li></ul>Source:<br />40<br />
  132. 132. SONY<br />MEDIA ISSUES: Potential Media Cures<br /><ul><li> Emphasize and be aggressive on advertisements
  133. 133. Mimic the Iphone campaign Apple used. Show how this product can be used, the many different functions, rather than just stating the facts
  134. 134. Use the national press. Networks like CNN and the New York Times breaking news to any new products and software by Sony will grab attention to the many viewers and readers</li></ul>Source:<br />41<br />
  135. 135. SWOT ANALYSIS<br />42<br />
  136. 136. SONY<br />SWOT ANALYSIS: Strengths<br />The company is an established and well known brand name of both Sony and PlayStation (PS)<br /><ul><li>According to the customer loyalty engagement index by Brand Keys, Sony ranks in the top 5 for many different categories for 2009 (5th for computers, 4th for digital cameras, 2nd for DVD players, 2nd for HDTV, 5th for wireless handsets).</li></ul>Sony is starting to bring in more exclusive games to the system.<br /><ul><li>Sony currently owns 159 exclusive game titles compared to the 117 games for Xbox 360 (Excludes console games, which are games exclusive to the relative system as well as the arcade)</li></ul>PS3 has the best raw computing power and graphics compared to competitors with strong multimedia support.<br /><ul><li>Sony is the only system to incorporate Blu-ray, a technology co-engineered by Sony, into the device. Blu-ray single-handed took HD-DVDs out of the market</li></ul>Source:<br /><br />43<br />
  137. 137. SONY<br />SWOT ANALYSIS: Weaknesses<br />Game developers find PS3 ‘too complicated’ to develop for.<br /><ul><li>Game developer Valve states "The PC and the 360 are just more straightforward. We can focus on what we want to do, which is make game experiences, instead of sweating bullets over obscure architectural decisions they make with their platform.”
  138. 138. Square Enix's president and CEO, Yoichi Wada finds the system ‘over-engineered’ and ‘mismatched’ to gamer needs</li></ul>II.Sony decisions questioned by game developers.<br /><ul><li>Sony implemented a 16 cents per Gigabyte fee to publishers for paid and free downloadable content, something that is free for the Xbox, the web, and anywhere else. This adds to the already pay cost for creating a demo, a process that can run six figures</li></ul>It is estimated that the Sony games division’s operating losses this year could <br />come in at $400 Million to $1.5 Billion, leading to Sony announcing an overall operating loss of more than $1.2 Billion for 2009<br />Source:<br /><br /><br /><br />44<br />
  139. 139. SONY<br />SWOT ANALYSIS: Weaknesses<br />Source:<br />45<br />
  140. 140. SONY<br />SWOT ANALYSIS: Opportunities<br /><ul><li>With prices lowered by $100 as well as a redesigned ‘slim’ version, Sony has the opportunity to increase sales as it becomes settled in a more competitive price range with the Xbox 360 and the Nintendo Wii
  141. 141. Sales of PlayStation 3 hardware have grown during the second quarter for 2009 to 3.2 Million, compared to 2.4 Million in the previous year.
  142. 142. Sony also sold 23.9 Million PlayStation 3 games during the period, up from the 21.2 Million in 2008
  143. 143. Nintendo posted a major 52% slip in fiscal first-half of 2009 profit, partly due to the competitive price cuts of the Xbox 360 and the PS3
  144. 144. Synergy opportunities are causing first party developers to excel and third party to keep in pace and increase game productivity
  145. 145. First party studios such as Insomniac, Naughty Dog and Guerilla Games are starting to form close-knit relationships and offer each other advice and tech tips with their ongoing projects
  146. 146. Third party developers are finding it easier to first develop on the PS3 and then bringing it together to port over to the Xbox 360 rather than trying to split up Xbox 360 code to port over to the PS3
  147. 147. Adding more content to the PS3 is key to attracting more PS3 buyers
  148. 148. Sony is beefing up PlayStation Network’s offerings of games, movies, music, comics, TV shows, social networking, and other online services.
  149. 149. With Xbox 360 the only system offering Netflix, Sony reached a deal with Netflix, offering unlimited streaming videos and movies to the estimated 9 Million PS3 users
  150. 150. The company is looking to take advantage of the high storage capacity of the media in Blu-ray and put both a full length high definition film and a PS3 game on the same disc by the time 2010 rings in
  151. 151. On October 28, 2009, it was announced that the demo for the PS3 game, God of War III, will be included with the Blu-ray of District 9 on the same disc
  152. 152. Opportunities to release add-on products to enhance the PlayStation experience
  153. 153. The announcement of a motion controller set to be released in Spring 2010 provides competition for Nintendo’s motion controlled Wii. It was also announced that it will not be a peripheral but instead a standalone hardware platform compatible with the PS3</li></ul>Source:<br />46<br />
  154. 154. SONY<br />SWOT ANALYSIS: Threats<br />Nintendo Wii<br /><ul><li>Nintendo’s $200 Million marketing campaign of the Wii as an “anyone-can-play” and a “family-oriented system” continue to steal sales from Sony and Microsoft.
  155. 155. Until Sony releases it’s motion controller, the Wii will continue to be considered the exclusive system for interactive motion play</li></ul>Xbox 360<br /><ul><li>Exclusive Titles
  156. 156. Much Larger Online User Base</li></ul>Mod-chip development<br /><ul><li>The 1st mod chip was rumored to be produced by Belzar, supporting PlayStation 2 and PlayStation 3 bootlegged games. This can further hinder sales for Sony as their strong effort to prevent piracy may go in vain</li></ul>PlayStation 2<br /><ul><li>With backward-compatibility of PS2 games removed for the new ‘slim’ PS3, consumers could possibly steal focus from the PlayStation 2</li></ul>Source:<br />47<br />
  157. 157. PRODUCT POSITIONING<br />48<br />
  158. 158. SONY<br />Product Positioning<br /><ul><li>Sony’s marketing campaign has deemed the newly released PS3 as the “total entertainment solution.” However Sony had switched their position for the PS3
  159. 159. "Sony first unveiled the PS3 as a mighty home electronics product. Then, after some badgering from game companies, it shifted the position of the console closer to a game machine. (The future of the PS3) would be tough if its marketing strategy is not straightened up.” -Square Enix President Yoichi Wada, 2007
  160. 160. With the release of the slim version, Sony repositioned the PS3 as an all-purpose entertainment system once again</li></ul>Source:<br />49<br />
  161. 161. Product Positioning<br />SONY<br /><ul><li>PS3’s changing focus between an all-in-one system and a core gaming console drew criticism from core gamers and analysts, claiming not to produce enough top notch games to satisfy their needs as is Xbox 360
  162. 162. According to NPD group, consumers in the U.S. have bought just over 8 Million PS3s through the end of July, compared with more than 15 Million Xbox 360s
  163. 163. Xbox is clearly capturing the core gamer audience with their high-end games such as Halo and Gears of War
  164. 164. Wii is capturing the family-oriented audience with their interactive system
  165. 165. Sony does not need to reposition their market campaign, but it does need to stick with their main focus and that is to make it an all-in-one entertainment system</li></ul>Source:<br />50<br />
  166. 166. RECOMMENDATIONS<br />51<br />
  167. 167. RECOMMENDATIONS: PlayStation 3<br />SONY<br />Sony should seek to maximize the value of the<br />PS3 and to aggressively market it as not only a powerful video game console but also an<br />affordable home entertainment hub<br />I. Effectively market the PS3 as an affordable home entertainment hub<br /><ul><li> PlayStation Network should offer games, movies, music, comics, TV shows, </li></ul> social networking, and other online services <br />II. Imitate Wii’s motion sensing controller and offer it as an add-on for the PS3<br />Use the PS3 to fill different customer niches and encourage PS2 owners to <br /> gradually upgrade to the PS3 by eliminating PS2 productions<br />Leverage its core capabilities and exploit synergies between the PS3 and other <br /> Sony products<br /><ul><li>Blu-Ray</li></ul>Source: <br />52<br />
  168. 168. THANK YOU<br />QUESTIONS & COMMENTS?<br />53<br />