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Forums - Sales - Sony made a choice: market share > profit

It's possible that SONY can weather this storm until they return in the black. Then again maybe they are just taking a risk to run business as if normal, hoping that there will be an upturn in the economy. But the bottom line for gamers is to enjoy SONY pushing the PS3 while you can because with the exception of classic Nintendo franchises, I have never seen a console maker pushing so hard to cater to gamers.



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he Slimebeast said:
Khuutra said:
Slimebeast said:
Khuutra said:

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

For the fans it is. I don't care that much if Microsoft loses money on the Xbox, for me it's a lot more important that they expand their userbase, release lots of exlusives and win the console war so we can be proud in front of the Sony guys.

I can't tell if you're joking with that last part

It's obviously expressed in a humorous tone but I'm not joking.

We Xbox fans are very concerned that the Xbox hasn't got the respect it deserves from gamers all over the world.

The original Xbox was 2nd last gen while the 360 is currently 2nd this gen.  Either you're taking this all too personally, your expectation of "respect" is too unrealistic, or you're putting your faith in the wrong things.



Hackers are poor nerds who don't wash.

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.



“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.” - Bertrand Russell

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Jimi Hendrix

 

binary solo said:

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.

It's quite unlikely that the PS4 will make back what they lost in the PS3 era... I say that because in the past few years they have lost more than they profited during the PS2 era.

Heck at this rate they might have already erased the PS1-era profits as well, or at least they shouldn't be too far from it...

 



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CGI-Quality said:
http://ps3.nowgamer.com/news/3154/playstation-3-turning-a-profit

Don't know if that's been posted anywhere yet.

No on here is reporting it yet because it's wrong.



The rEVOLution is not being televised

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thats a good thing for us. let sony worry about the money.



lol market share first and then profits? how stupid is that i mean you should work on keeping your company afloat first so you can gain more market share or risk going under before you gain any market share at all :P



    R.I.P Mr Iwata :'(

No i think if that they chose market share THEN profit.... if they were to choose profit before hand they would have been out of the race a while ago :P



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.



Slimebeast said:
Khuutra said:
Slimebeast said:
Khuutra said:

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

For the fans it is. I don't care that much if Microsoft loses money on the Xbox, for me it's a lot more important that they expand their userbase, release lots of exlusives and win the console war so we can be proud in front of the Sony guys.

I can't tell if you're joking with that last part

It's obviously expressed in a humorous tone but I'm not joking.

We Xbox fans are very concerned that the Xbox hasn't got the respect it deserves from gamers all over the world.

you are an underrated comedian in this site and you always crack me up , love you man! haha