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bobobologna on 14 May 2010
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binary solo said:
Khuutra said:
Slimebeast said:
Sony treats their hardcore fans well. They understand how important it is for a fan that the brand is popular and aims to dominate the market.

Marketshare first, profit is secondary in my opinion.

I wish MS would do this too to win the console war. :/

Why? How could marketshare possibly be more important than profit?

Because larger market share (or rather larger install base) --> better long term profitability, viability and recognition of the brand.

There is certianly a point of diminishing (or negative) returns with this strategy. But if Sony is looking one or even 2 console generations ahead then another year of a small per unit loss (and lets face it if they drop the price by $50 the per unit loss is going to be a lot less than $5)) for the PS3 to keep momentum and market share increase going possibly means they haven't hit that cross over point yet.

With the right product and the right strategy PS4 can make back the PS3 losses. Especially if PS3 can sell profitably for a few years as well.

Personally I'd be worried if Sony went for a profit over market share strategy before now (or rather before Slim came along) because that would imply that Sony were going to exit the home console game, but try to cut it's losses while it runs the PS3 down.

I don't think Sony has been following the John Kay playbook really, but John Kay's research suggests that solely focussing on profits is detrimental to a company's/product's long term viability. So ensuring you have a good product, with a good reputation is a big part of long term survival, and Sony had/has a lot of reputation to try to re-establish with the PS brand. I don't think they're there enough that they can swing their focus mostly behind profit.

To add to that, the Playstation brand is still very big, and Sony is looking to expand it's Playstation branding into other electronics.  For example, the new Viaos laptops have remoteplay, and they plan on expanding the Playstation Network video store to PCs, TVs, and Bluray players.  It is very conceivable that Sony would take a hit on the PS3, in order to maintain and gain marketshare, brand recognition, and maybe brand loyalty.  Of course, as you said, there is a limit to how far they can go with this.

The XBox and Playstation brands have become much larger than just the consoles themselves.  For example, Microsoft is pushing XBox Live into the mobile space with Windows Mobile 7's XBox Live integration.