PlayStation Frustration

An article on the the short sales of the PlayStation3 being beaten out by Playstation2 was posted
recently. This is interesting to me since I predicted a similar circumstance months ago in a marketing research assignment.

There are a couple drivers I see for this:

• Product
• Pricing
• Marketing

The Playstation3 is a worthy product with incredible graphics and games. One of the reasons I want one is the Blu-Ray player it comes equipped with, which Wii and Xbox don't have. It's a complete entertainment system with online capability and a host of features. Unfortunately, the PS2 is still on the market and still a very viable system. @ $100 it's tough to beat, especially since there are many games that are backward compatible. Also, recently PS2 coding was made available so now there is a host of "indie" games coming out you can play on your PS2. Some really good stuff out there too.

PS3 has some premium pricing setting it a couple hundred $ above XBox and Wii. Sony has usually had premium priced products. That's their image and they've cultivated it with their style and offering. In the past they have been the ones to beat, but lately they've suffered from their competitors offering quality products @ cheaper prices. The downturn in the economy hasn't helped either. As sales dropped, budgets were reduced and cost cutting ensued. PS3 is expensive to make. Sony produces it at a loss intending to make up the revenue on games, but with sales down, that breakeven point moves further and further down the road.

I feel that if Sony is going to save the PS3, its reputation, and its other products as well, Sony MUST get some invigorating marketing/advertising out there to build brand presence, restore value, and customer confidence. This is the best time to do it. While others have cut back on their advertising budgets, Sony can fill tthe space and gain greater exposure. You can do it cheaper too. Advertising companies are hungry for work and want to deal. TV/internet too have suffered with a downturn in sales and Sony could use this to their advantage.

There has been some discussion that Sony is more interested in promoting its entertainment division and can't compete in electronics any more. I think this tactic would be akin to "putting all your eggs in one basket." Sony's core competency has been electronics and it should protect and nurture those strengths. Sony should back its premium products like PS3 and be mindful of the market so they don't have another BETA vcr fiasco or watch it disappear into obscurity like the Walkman.

On with the show!
RedJester