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Forums - Gaming - Sony fighting to stay relevant?

fauzman on 28 September 2012

I think worrying about sony at this stage is a bit premature. Firstly the price for the vita is a bit too steep but a price cut will soon see sales shooting up. Here in nz, the psp has been the most popular gaming device this gen and once the ps Vita drops in price, and reaches the magic figure of $250 we will see tons of sales.

Add to this, sony are clearly not putting all their eggs in one basket. Unlike nintendo, sony are willing to put their games on smartphones and are currently making arrangements with phone devs to do so. Add to this, I think sony and the playstation brand occupies a different level than iOS games in that they are deeper, more mature (hardcore??) experiences so I think they will be able to differentiate themselves from competition.

As for the ps3, I think it has gone from strength to strength. Sony have lost their exclusive 3rd party dev support but in the process have considerably expanded their own 1st party and 2nd party network and have gained a huge number of new IPs. Some have been average and even unsuccessful but a number of them have gone from strength to strength. I agree that the ps4 will probably not dominate the world of gaming the way the ps2 did but I definitely think that it will do much better initially than the ps3 and will get much better quality exclusives at launch.



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DanneSandin on 28 September 2012
UncleScrooge said:

First of all: I think Sony will make it. They are in trouble but at least SCE can get out of that. That being said they will need a different strategy than an arms race with Microsoft. I think it's really telling what Sony did this year - or rather didn't:

- They did not cut the Vita's price even though it is in deep trouble
- They did not cut the PS3's price even though a cheaper-to-produce model was released
- They closed down several studios

Sony has always been very aggressive at dropping prices and undercutting its competition. They simply can't do this anymore. The strong Yen really came at the worst time for them, a time when they were already in trouble.

Usually Sony's strategy in the gaming market is to gain market share by undercutting the competition at first and regaining the losses later. But this time they can't lose money on the console for the first three years because they've been in the red for a long time now. The strong Yen makes it even worse and Sony's current credit rating doesn't help, either. On top of that Microsoft is in a very strong position to sell their next console at an initial loss.

The Sony of 2006 was able to lose $200 on each PS3 sold and still cut the price by $100 a year. The Sony of 2012 can't do that. They'd have to keep the price up longer. This is exactly why Nintendo dropped out of the graphics race in 2006 and developed a disruptive product instead: They had no chance to outspend or undercut their competitors and they knew they would lose that race. Sony is in the same position now but unlike Nintendo in 2006 they don't have a solid financial foundation and because of the strong yen they might have to release a weaker consoles than Microsoft and charge a higher price for it (the PS3 was always said to be slightly stronger than the 360, it had a Blu-Ray Player and came with a bigger HDD).

Sony's position is not unlike Sega's when they released the Dreamcast: They had lost money and market share with their last console and they had to compete with a big, financially robust competitor. That's not to say Sony will share the fate of Sega, of course. I still think they'll make it. But we shouldn't act like Sony was all fine and ready to fight in an arms race with Microsoft next gen.

Sony's best answer to this is not an arms race with Microsoft but the same thing Nintendo did: Looking for blue oceans or releasing a disruptive product that competes on values other than power and graphics. In direct competition the bigger company will almost always win because direct competition is a race of resources while disruptive innovation is a race of values.

I thought this was such a great post that deserves to be read twice, and that's why I'm quoting it ^^



I'm on Twitter @DanneSandin!

Furthermore, I think VGChartz should add a "Like"-button.

man-bear-pig on 28 September 2012

Yes, they definitely are fighting to stay relevant. They used to be the leader in almost every market they were in, and now look at them...
--> Last place in the gaming market
--> Far behind Samsung in the TV market
--> Nearly non-existent in the smartphone market
--> Basically non-existent in the tablet market
--> iPods have crushed their Walkman brand
--> Losing marketshare in the music industry (no longer #1)
It's not looking good for Sony. 

EDIT: 

--> The camera industry is also dying, which was one of Sonys strong points back in the day



My prediction threads:

Wii U will sell under 40m units (made on 14th September 2012)

PS Vita will sell under 20m units (made on 30th September 2012)

Wii U will sell under 7m in 2013 - I was right

Halo 4 first 9 weeks sales prediction

PS4 to be down YOY in 2015

DanneSandin on 28 September 2012
man-bear-pig said:

Yes, they definitely are fighting to stay relevant. They used to be the leader in almost every market they were in, and now look at them...
--> Last place in the gaming market
--> Far behind Samsung in the TV market
--> Nearly non-existent in the smartphone market
--> Basically non-existent in the tablet market
--> iPods have crushed their Walkman brand
--> Losing marketshare in the music industry (no longer #1)
It's not looking good for Sony. 

EDIT: 

--> The camera industry is also dying, which was one of Sonys strong points back in the day

Hey, just to make things look even bleaker, why don't you seperate home consoles and handhelds? ;)



I'm on Twitter @DanneSandin!

Furthermore, I think VGChartz should add a "Like"-button.

Kenology on 28 September 2012
S.T.A.G.E. said:
TheBardsSong said:
More doom articles I see, but for once they're not aimed at Nintendo

Last gen they were saying the same thing about Nintendo losing money as well,remember? People were wondering if Nintendo could even afford to join the new gen.

What?  Nintendo losing money last gen?

Nintendo was insanely profitable off the Cube and GBA.  I don't think that was ever a legit concern, just a false perception.



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Kenology on 28 September 2012
UncleScrooge said:

First of all: I think Sony will make it. They are in trouble but at least SCE can get out of that. That being said they will need a different strategy than an arms race with Microsoft. I think it's really telling what Sony did this year - or rather didn't:

- They did not cut the Vita's price even though it is in deep trouble
- They did not cut the PS3's price even though a cheaper-to-produce model was released
- They closed down several studios

Sony has always been very aggressive at dropping prices and undercutting its competition. They simply can't do this anymore. The strong Yen really came at the worst time for them, a time when they were already in trouble.

Usually Sony's strategy in the gaming market is to gain market share by undercutting the competition at first and regaining the losses later. But this time they can't lose money on the console for the first three years because they've been in the red for a long time now. The strong Yen makes it even worse and Sony's current credit rating doesn't help, either. On top of that Microsoft is in a very strong position to sell their next console at an initial loss.

The Sony of 2006 was able to lose $200 on each PS3 sold and still cut the price by $100 a year. The Sony of 2012 can't do that. They'd have to keep the price up longer. This is exactly why Nintendo dropped out of the graphics race in 2006 and developed a disruptive product instead: They had no chance to outspend or undercut their competitors and they knew they would lose that race. Sony is in the same position now but unlike Nintendo in 2006 they don't have a solid financial foundation and because of the strong yen they might have to release a weaker consoles than Microsoft and charge a higher price for it (the PS3 was always said to be slightly stronger than the 360, it had a Blu-Ray Player and came with a bigger HDD).

Sony's position is not unlike Sega's when they released the Dreamcast: They had lost money and market share with their last console and they had to compete with a big, financially robust competitor. That's not to say Sony will share the fate of Sega, of course. I still think they'll make it. But we shouldn't act like Sony was all fine and ready to fight in an arms race with Microsoft next gen.

Sony's best answer to this is not an arms race with Microsoft but the same thing Nintendo did: Looking for blue oceans or releasing a disruptive product that competes on values other than power and graphics. In direct competition the bigger company will almost always win because direct competition is a race of resources while disruptive innovation is a race of values.

Good post.



YukanaSenix on 28 September 2012

Nah
Sony is Number 2 in the gaming Market even after they had such a bad start in the beginning.
Don't forget > Microsoft had the advantage of 1 year and that 90% of all consoles died so people had to buy a 2nd console over the year.65 Million sold 360s?Yeah exactly > To 30 Million people and most of them only play CoD and Halo.
Sony is the true Number 2 - Especially cause they outsell the 360 worldwide for years now and sell a lot more software on their console.
They just need to bring the PS4 at a normal price and it will sell like hot cupcakes.And of course they need to fix their architecture thing > If they change it again then they should make it easy for all those noob developers that complained half of the Gen that it is to hard to develop for the PS3....SO HARD THAT NAUGHTY DOG IS PUSHING THE PS3 SO EASY...GET SKILL or release your crap games for 20$ maximum if you can't do your job noob developers.



sales2099 on 28 September 2012
Jay520 said:
sales2099 said:

Game to game offcourse GTA is bigger. But Madden keeps millions coming back for more every year. And well, sales of a franchise over the course of the gen does determine which one is a bigger franchise. You cant tell me one franchise is bigger when it sells less and generates less money......

Game per game is one thing, but im talking franchise vs franchise. And in that regard, as much as many gamers here dont like it, Madden is bigger then GTA for simply having frequency. But I wasnt referring to "moving" a console. Any game can be a system seller. Im alking about system carriers. And GT releases too little to be considered a carrier for an entire gen. 


Franchise total sales is not much of a factor when it comes to carrying a console. It' s how large the game's installbase is. 

For example, imagine two different Franchises: Franchise A and Franchise B.

Franchise A releases a new game every year, for 6 years, with each game selling 3million units. That would be six different releases in total. That totals 18 million units for the franchise.

On the other hand, Franchise B only releases one game throughout six years. And the game sells 15 million units. Of course, that totals 15 million units for the franchise. 

Franchise A has sold 18 million units. Franchise B has sold only 15 million units.

Using your logic, Franchise A is biggger than Franchise B, and thus, is the bigger "system carrier". But that's not true. Let's look further...

The best selling game from Franchise A has only sold 3 million units. Thus, the fanbase of Franchise A is around 3 million units players. Therefore, Franchise A can only "move" about 3 million units, because that's how big it's fanbase is.  And to be more lenient for Fanchise A, let's assume there has been some overlapping inconsistencies, so let's bump Franchise A up to 5 million. So Franchise A can only shift 5 million units in hardware.

Now look at Franchise B. The best selling game from Franchise B has sold 15 million. Thus, the fanbase of Franchise B is around 15 million units. Therefore, B can move about `5 million units of hardware, because of how big it's fanbase is.

So, Franchise A would only shift 4.5 million units of hardware, at best.

While Franchise B would shift 8 million units of hardware, at worse.

And you would tell me Franchise A is better at carrying a console?  You have a stranger definition of "bigger"

Like I said, franchise A would generate more money and total sales then franchise B....hence its technically bigger. Fanbase numbers are only as good as the frequency of the franchise. Frequency also means that your current in the minds of the gamer. One game every 7 years, no matter how popular that one release was, will be forgotten as years and the next big games come out. You need to be current, you need to be on the back of gamers minds almost every year. That is why I think frequency matters.

But to drive this home.....Uncharted (A) has moved more consoles in all 3 games then GT5 (B) has done alone. "Franchise" sales, Frequency, Being current. Thats what matters (to me at least).



Xbox: Best hardware, Game Pass best value, best BC, more 1st party genres and multiplayer titles. 

 

saicho on 28 September 2012
S.T.A.G.E. said:
TheBardsSong said:
More doom articles I see, but for once they're not aimed at Nintendo.

Last gen they were saying the same thing about Nintendo losing money as well,remember? People were wondering if Nintendo could even afford to join the new gen.

The difference is Nintendo never lost money last gen and Sony is actually losing money for several years now.



MikeB predicts that the PS3 will sell about 140 million units by the end of 2016 and triple the amount of 360s in the long run.

thranx on 28 September 2012
S.T.A.G.E. said:
TheBardsSong said:
More doom articles I see, but for once they're not aimed at Nintendo.


Last gen they were saying the same thing about Nintendo losing money as well,remember? People were wondering if Nintendo could even afford to join the new gen.

Nintendo made the most profit last gen. They did not loose money. Don't know where you got that from.