Sony Playstation 3 Case Essay

The mainstream gamer enjoys games but may not finish every game they buy and doesn't have time for long MMO (Massive Multiplayer Online) quests. The mainstream gamer represents approx. 15% of the gaming market.

Microsoft targets numerous segments of the population of many countries through advertisements of its Xbox. Microsoft, one of the most successful companies in the world, is using its innovations to take over the machine gaming market. Sony and Nintendo have been the gaming powerhouses for many years now, but are now starting to become overshadowed by the success of Microsoft’s Xbox. As long as gaming machines have been available, teenage boys have been the targets of the companies. One new strategy that Microsoft is using is the targeting of all ages and both sexes of consumers. While other companies continue to stay in the young kids and teenage market, Xbox is revolutionizing the target market of gaming systems.

If you've never touched a video game controller in your life, but do have avid players in your household, you may be in for a bewildering month. That's because we're on the verge of what the gaming industry excitedly calls 'a new console generation'. In short, the Xbox 360 and PlayStation 3, once the most powerful games machines on the planet are being replaced – the former by the Xbox One, the latter by the PlayStation 4 (PS4).

Nintendo appears to have implemented a market-penetration pricing strategy. The Wii at a cost of $250 is 50% less than the 20-gigabyte PS3 (smaller hard drive machine). At this lower price, it is easier for the product to penetrate the market due to affordability in most segments. This aligns with the assumed company’s aim of maximising market share in the current and new segments. To achieve this, Nintendo ensured that the Wii was less costly to manufacture. Moreover, a higher sales volume may lead to lower unit costs and higher long run profits. Conversely, Sony is believed to have a market-skimming pricing strategy. The company invested $2 billion in technology, so this strategy aims at recovering the maximum amount of revenue to cover the high costs incurred in the early stages of the product life cycle. Additionally, Sony has a strong brand due to the success of their previous machines (PS2 and playstation) and the high price assists in communicating the image of a superior product with quality.

The lifestyle of a hardcore gamer is to be antisocial around human beings, but through the connectivity of the Internet to be social and build friendships and relationships through video games. Xbox has created a live chat while playing video games to verbally speak to the gamers or instantly chat. The social class gamer is divided by the income category that they fall on. Upper and middle class have the ability to spend money on new consoles in the gaming industry, while the lower class does not have the funds to invest in all of the new consoles that are released. The most important key point of the demographic component is the behavior of a gamer. It is important to have a strategic target plan for any new consoles; however, behavior gamers are the marketing targets to any new innovation. Behavior gamers are the most loyal consumers and it has a significant amount of the profitability to the company. As a result, the three different components makes up the target market and is very crucial to be strategic with the plan and know the potential

1. Based on the information provided for the market for video games, answer the following questions.

Threat of Substitutes: The main substitute for a video game console would be a personal computer. They can both be used for playing different types of video games and be used for entertainment. The threat of this substitute edging out video game consoles is very low, because they are not completely similar. If anything, video game consoles are edging out personal computers in the gaming industry. The threat of substitutes in the video game is not very high. In 2008, this was not a very strong force in the video game industry.

As sales of Nintendo’s Wii and DS dominate the PlayStation 3 and Xbox 360, and PlayStation Portable, respectively, the pressure continues to mount on Sony and Microsoft to move to the next level in the ongoing console wars. Sales of the Wii in 2008

These two consoles alone have been the main focus and cause of online blog battles – but do we truly understand the fundamental gaming differences between a Windows PC and a Macintosh? Console gamers need to understand the over rated outlook of the Macintosh and should invest more of their equipment in PC content. These gamers should use PC instead of Mac computers. The lack of gaming capability/availability and user-friendly creativity, high prices, repair capability, more possibilities of cybercrime, and overly extravagant appearance of the Mac are all facts that are never acknowledged by companies and gamers when referring to the Mac as a “gaming”

5. Put yourself in Sony’s shoes. You look at the answers to the 4 above questions.

However, when Microsoft started the development of its next generation console- the Xbox 360- it recognized the deficits and problems related to its initial strategy: the company was operating under too high costs in order to assure high product availability which was not the critical factor in this business. The nature of the console business is about providing the customer with a cheap hardware and a variety of games, in order to generate profits from games sales. Additionally, the first Xbox was released one year behind Sony’s PS2, Microsoft’s biggest competitor in the market. This delay resulted in a substantial loss of sales and consequently reduced game sales. Therefore, Microsoft learned that the Xbox 360 had to be launched ahead of Sony’s PS3. Accordingly, one relevant part of Microsoft’s new strategy was the “first-to-market” approach. Another essential change in Microsoft’s business strategy concerned its cost structure in the Xbox supply chain. Whereas the initial strategy focused heavily on reliability, Microsoft changed its strategy to achieving reduced costs and increased profitability. Additionally, the company insisted on owning the design of critical components, such as the microprocessor and the graphics chip, in order to “control its own destiny”. Therefore, the supply chain network needed to be redesigned in order to support Microsoft’s strategic shift. So as to reach the desired cost

Nintendo creates many games in a long time period including one of their greatest sellers. The Legend of Zelda. Released in 1987, this adult fantasy game including dungeons, dragons and a brave little hero rise to the top of the Nintendo world. Nintendo doesn’t stop there. In 1989 they release the brand new handheld gaming system known as the GameBoy. This isn’t the first handheld gaming system but with multi-colored covers, easy-to-use controls and a long battery life, it’s very hard to be beaten. With Nintendo ruling the gaming industry in the late 1980’s and early 1990’s, Sega needs some assistance being put back on the throne of the gaming industry. Thus, Sonic the Hedgehog is born in 1991 for the Sega Genesis. With his extremely incredible speed, Sonic rises the the top like it’s nothing. In 1995. Sony releases the Playstation. This new kind of gaming console grabs the attention of many gamers and this takes a bad toll on Sega. When the Playstation 2 releases in 2000, it quickly takes it’s rightful spot at the top of the gaming world as Sega is put out of business. Yet once again, another big face emerges into the gaming world. Microsoft debuts Xbox in 2001, releasing games like Halo, Spongebob, racing games, and many more. Microsoft maintains dominance once the Xbox 360 is released several years after the first Xbox. Nintendo is still quietly ruling the handheld gaming industry but still can’t compare to the things Microsoft and Sony are releasing. In 2006, the Nintendo Wii creates a fun, new kind of gaming style by getting its users up and active with sports games and games that require a lot of body movement. It’s now 2016 and these companies are still running the game market as the highest paid and largest known industries. The Xbox One and Playstation 4 have now been released with both consoles having a rivalry but

Overall, the market response to these three consoles has been surprising. Nintendo Wii, has outsold its rivals and more surprisingly, Sony’s PS2 has outsold PS3. This has let Microsoft and Sony with the enormous challenge of competing with a rival possessing two key advantages: a lower cost console and a product with a sound response in the market.

With the advancement of new technologies such as high definition(HD) and motion sensors it was only natural that consoles would evolve to incorporate these new breakthroughs. The first seventh generation console to be released was Microsoft’s Xbox 360 on

Sony must reposition its “growth driven” and “stable profit generator” sectors in their markets to increase its audience, achieve sales growth, profit expansion and maximization, and capture market shares.