| Killiana1a said: So what you are saying is that Sony with the Move is engaging a Red Ocean business strategy. Here is a succinct definition of the Red Ocean business strategy. "Red ocean is where competitions exists and are heavily contested. Profits and growths are thin in a red ocean. It is basically a zero sum game were only the strongest survives. However, it is easier to enter because the industries are defined already so you can just copy others; however, surviving is a different story. Let’s just say red ocean is easy to enter, hard to survive." Source: http://marketingdeviant.com/blue-and-red-ocean-business-strategy/ |
I have to disagree with you on your assessment that Move is entering into a red ocean. I'll use your own source as support for this:
"Red ocean is where competitions exists and are heavily contested. Profits and growths are thin in a red ocean. It is basically a zero sum game were only the strongest survives. However, it is easier to enter because the industries are defined already so you can just copy others; however, surviving is a different story. Let’s just say red ocean is easy to enter, hard to survive."
Move isn't entering into a red ocean because it is not entering into a zero sum market. Not one single console can claim to cover the entirety of the market and profit and growth have still got the potential to be very strong. Move isn't a direct competitor to Kinect and Move isn't going to offer precisely the same experience that Nintendo offers with the Wii. Further to that, the market itself isn't a free market as there are only three major players. It is an oligopoly, however within the Playstation eco-system by itself it is also a true monopoly in the purest sense. Beyond this there are a large number of console owners who are already invested heavily in the Playstation 3 so it makes switching consoles potentially unappealing.
| Killiana1a said: Lets turn your argument on it's head: 1. "Sony needs to get you, the PS3 fan to buy the Move first because they simply do not have the advantages of novelty or ease of demonstration which came naturally to the Wii at launch and which Microsoft has with Kinect. They need you to show the non PS3 gamer what Move is all about before they can start serious promotion of the interface." In the biggest single market, the Americas, Sony has sold 14.4 million PS3s compared to Microsoft's 24.1 million 360s and Nintendo's 34.3 million Wiis. (http://www.vgchartz.com/#Americas Totals). A few questions arise from a business strategy seemingly built around catering to existing owners and word-of-mouth: A. Is Sony testing the waters in the Americas market before they start to market Move heavily in the Americas? If the Move does not generate the sales of PS3s that they want, then what is their Plan B for competing in the Americas? A PS3 price cut down to $150-200? B. Why cater to the core? Why not cater to those tens of millions who are not in the gaming market? C. The PS3 has sold 10 million less than the 360 and 20 million less than the Wii in the Americas. Why would Sony limit it's customer base by only catering to 14 million existing customers? |
A B C: Its because their market entrance strategy has to be different to the Wii and Kinect with the Xbox 360. Nintendo was the new kid on the block and they went straight for the unattached consumer, the non gamers. This enabled them to gain incredible traction within the market very quickly and very easily, this is the total crystal ocean first mover advantage than Nintendo had when they launched the Wii. The people who bought the Wii in the mass market had no real attachment to other consoles so there was nothing holding them back from purchasing aside from the timing of when they were exposed to the Wii and the level of their desire to get one afterwards. Now that the market knows what a Wii is, they have to convince people who have already experienced the Wii that their version is better but they cannot take advantage of novelty or a rapidly expanding userbase from day 0 to drive word of mouth.
Kinect also has much better point of sale marketability. Kinect is just a camera and it is both novel and easy to demonstrate in a store environment. It can litterally draw people in to try it out and they can easily display it in every single store which sells video games and consoles. Whereas on the other hand Move is simply at its heart a better mouse trap. The best people to sell a better mouse trap to aren't the people who already have mouse traps. The best people to sell them to are the people who don't have mouse traps at all. Now drawing back to the monopoly they have with PS3 owners, since they are essentially a captive audience they can use what is effectively an Amway like strategy of using their best customers to sell their Move controller to new customers. They need to prove to the people who currently have mouse traps that theirs is better and the current PS3 userbase are the people they have picked to do that job. So this is why selling to PS3 owners first is the better strategy.
| Killiana1a said: 2. "Extensive promotion of the Move controller this year is counter productive. They need to wait until they have the ability to price a Move enabled PS3 at a point which the mass market will accept without incurring great losses. This is why obvious games like RFOM 3 are no shows and why Socom has been delayed until 2011. Theres no point advertising a product when the price and experience hasn't come together yet. Next year is when they need the games, this year is just a taster." Indeed it is counter-productive and downright stupid on face. You bundle the Move with the PS3 from the get-go because you will have a harder time catching up than keeping a lead. Makes no sense to cater to the core first, then change your business strategy midstream and start catering to the casuals. The risk is that those casuals will have already purchased a Kinect or Wii by January 2011. |
The market is fluid. Sony aren't trying to sell people a lifetime supply of chocolate. So once people have their chocolate the market declines and dies. Besides this, noone ever really says that Move is a bad interface. All the reasons given for Move to fail or not make any significant impact only relate to one of two things. They don't get the games / experience working which people appreciate and/or if they do Nintendos dominance of the market at the present time won't allow them to make headway.
With both Microsoft and Sony kicking up a storm of market changes it is quite arguable that they are doing enough to trigger a 'next generation' like atmosphere. So whilst Kinect is a competitor in many ways it is also helping Sony as well. Console generations may be defined by us as the technology improvements from a new console. For the mass market however it is defined by the new experiences that the games offer. I would say at this point that both Move and Kinect are offering new experiences, perhaps new enough to shake up the market in the same way that a real new generation would so much as to say that the current lines of console market share could blur or be erased to the point where hardware sales LTD could be useless for determining the actual active market share of a console.
| Killiana1a said:
3. "They feel they have no reason to rush things. Kinect isn't a direct competitor with the Move controller in reality and the games Nintendo has in store for the core market in the near term are less reliant on motion controls themselves. Also whether or not their confidence is well founded, they seem to have the belief that once they get the games, price, marketing and an evangelical user base on the ground to come together into a neat and powerful package. They seem to believe that the PS3 with Move will be more than competitive against the Wii and Xbox 360 in 2011." I cannot disagree here, nor think of any questions. As for the long version of your argument, I have to commend you for writing a well though out post and I thank you for the opportunity you have given me to escape boredom at work. I think if Sony is waiting until 2011 to take it's stand, then it will have waited too long. The big shopping season for video games in the Americas market, the US in particular, is during the holidays. The best selling day is Black Friday, which is the Friday after Thanksgiving (the last Thursday in November). If Sony is making it's move from January 2011 on, then it has the timing all wrong and their stand may end up with them on their knees. Business like life is a lot about timing. In business, the market does not wait for you. You either meet your competitors head on during the timing that they choose, innovate and have them catch up to you, or continually follow the leader who is Nintendo in this case. Either way, it will be fun to see how the rest of the year shapes up. |
Well thanks! 
Its not about waiting, its about timing your moves to the right time. They have a different rhythm as have an entirely different market dynamic. Im saying in this that they are making their own timing and getting all their ducks in a row before they take their big shot for glory. They have their own schedule. They obviously need to get themselves into the position Microsoft is in this year in having relatively profitable hardware and a good support base of software sales. To rush things would be to risk great losses and their market dynamic at this point doesn't support such a strategy, so any losses taken trying to force Move onto the market would be counter productive. Both players have done this, you've seen that every other year is a year for consolidation or an attempt to go for market share. 2010 is Microsofts turn, 2011 is open for Sony to have a go at it.
Tease.
