SPlayStation is a state-of-art gaming console, which is a crucial piece of hardware for gaming with a huge potential for transforming to a device for almost all the home entertainment needs in future. If we were in charge of the 2006 PS3 launch, we would focus on two main targets the “game consumers” and “game developers”. PS3 packs cutting-edge technology (e.g. the Cell processor and RSX chip), storage capacity of Blu-ray and the ability to go online out of the box. From the comparison of various features, it's perceptible that PS3 could offer a superior gaming experience and a value proposition that's pretty hard to beat.
However, we (Sony) need to come up with a better marketing strategy for PS3 to address our competitors, Xbox and Wii. Over the past two video game console generations, the size of the gaming population has increased significantly. Likewise, the gamers’ taste for game complexity and gaming features has changed dramatically. As a consequence of recent “console wars,” consumers are getting increasingly price sensitive, and trying to capture more value (consumer surplus) than in past with these new generation products.
Furthermore, creative marketing has produced additional “game player” segments and video gaming has become a mainstream entertainment option. However, each segment has different price points and unique definition of “entertainment.” In order to persuade the gamer in these new segments and match those price points, we would launch PS3 in more than two flavors to cater to more segments. In addition to a strong focus on smaller “hard-core gamer,” we would also need to focus on the “casual gamer” segment, which is growing at higher rates. This step will ensure that we are positioning ourselves to capture a bigger market share in long run.
In the gaming industry, content (game software) drives long term value for the consumers and producers. Cost of developing PS3 content (games) is significantly higher than Xbox or Wii....