Sony needs to change their game plan.

[Sullla]

NJ5 said:

Regarding the "losing money to gain market share doesn't work" argument, allow me to disagree.

Gaining market share and making a brand name is very important, and Sony knows it. In fact, the Playstation brand name is so strong that it took many mistakes to screw it up, which Sony did.

For example, do you think the PS3 would have sold ~800k consoles during the European launch if it wasn't for their brand name? Imagine an unknown company trying to sell a $600 console with virtually no worthwhile games, and think about how many they would sell.

The conclusion is that Sony did a fantastic job at building up the Playstation brand name, and now screwed it up, not due to lack of money or brand name but mainly due to mistakes in planning, development, marketing and PR.

You've essentially made my point for me. Yes, a market share strategy will build up fans and establish a brand name in the short run. (Remember all the Sega fans in the 1990s, anyone?) But since no company is perfect, inevitably mistakes will be made. No one can see the future; everybody releases a clunker eventually. For Nintendo, it was their restrictive licensing agreements, incredible arrogance, and cartridge format in the 5th generation. For Sega, it was the release of too many hasty systems and a whole lot of falling on their own sword. For Sony, it was ignoring price point and trying to build the most powerful console possible (currently ongoing). Everybody makes mistakes and screws up sooner or later. And when pursuing a market share strategy, one generation of console losses destroys the success of many, many successful generations. Historically speaking, it was inevitable that Sony would make a mistake eventually - that's why selling at a loss over and over again doesn't work!

@Bodhesatva: thanks for clarifying. I agree that this is a bad strategy for Sony to pursue at all, but doubly bad given that one of its competitors seems to determined to bleed itself even further into the red to win market share. That a no-win scenario there.