Before the advent of the Playstaion console, Nintendo, another game maker, had control of a big part of the game market, but "their games were usually simple and consumers were usually between 6 to 13 years of age, due to limited technology." (Deshpande, Rohit p. 8). The Sony Playstaion and playstation2 however, came out with high resolution 3-D graphics, and "enabled game developers to create more sophisticated games that appealed more to mature gamers, especially those between 20 and 30 years old" (Deshpande, Rohit p. 8)
The Sony Corporation is the Manufacturer of the palystation2 console, and the company has set up various websites that serve as the company's driving force on the internet. Sites like sonystyle.com and playstation.com. These Websites provide information about new and upcoming Playstaion games, game console sales, and customer service. Playstation.com has already been quite successful, because the Playstation console is an industry leader when it comes to video games.
Sony has also been striving to create an all new lifestyle in the net era, which is based on the interconnectivity of Sony's digital electronic products with modern IT technologies, and the company is well positioned take the lead in the market for digital home products, if it succeeds in aligning its software systems with its content business lines. Presently, the company has been perceived to be in a struggle to reinvent itself, in the process of pursuing hit products like the new PlayStation3 console
Business Strategy & Analysis
The makers of the playstation2 console, Sony Computer Entertainment Inc. (SCEI), came out with the objective to own the largest share of the home video game market. The company intended to achieve this by "leveraging proprietary, interactive 3-D graphics technology to provide entertainment that was unmatched by any other game system." (Deshpande, Rohit p. 4)
Between 1994 and 1997, the price of the Playstaion console was reduced in a series of gradually increasing drops, forcing competitors to also decrease the prices of their products. "in 1997, Sony Computer Entertainment Inc. lowered the price of the Playstaion to $149, and Nintendo and Sega refused to reduce their prices too, but by 1999, Playstaion and Nintendo's N64 platform were being sold at $99 in order to clear inventory for upcoming game models.
In 2000, "Fuelled by anticipation of the success of playstation2, Sony stock rose, and hit an all time high of $314 from the $74 recorded the previous year". (Deshpande, Rohit p. 14)
SWOT Analysis for Sony and the Playstation2
Sony has many valuable physical assets
The playstation2 console is also a clear market advantage for Sony
Sony might be seen to have a narrow product line in its production of Playstaion games
Excellent software capabilities
Joint ventures with other progressive corporations
There is a risk that Sony's innovative nature with the Playstaion might not continue as well as it has in the past
There is a possibility that the video game market may, in the long run, separate the Sony Corporation video game makers into winners and losers.
Deshpande, Rohit Sony PlayStation2(A)
Grant, R.M. Contemporary strategy