Makeover needed: Sony's PlayStation

Posted Oct 23rd 2008 5:00PM by Steven Mallas
Filed under: Consumer Experience, Competitive Strategy, Microsoft (MSFT), Marketing and Advertising, Sony Corp ADR (SNE)

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

Can we agree that Sony (NYSE: SNE) stumbled when it launched the PlayStation 3? Sales statistics can be looked at from many different angles and spun this way and that. But the bottom line, as I'm sure any Sony fan will concede, is that the PlayStation brand has suffered an agonizing defeat, at least at this point in the current console war. At the time of this writing, the PS3 has sold over 14 million units globally. Microsoft's (NASDAQ: MSFT) Xbox 360 has sold 20 million systems. And last, but most certainly not least, the Nintendo (OTC: NTDOY) Wii has moved over 29 million units across the planet.

Without a doubt, the Wii has captured the imagination of both the mainstream, casual gamer and a good chunk of the younger generation. And a good many hardcore gamers are in love with the Wii as well. Not only that, but I believe that Nintendo has been able to leverage the popularity of its DS handheld system to convert a lot of those owners into putting Wiis on their Christmas lists. It's sort of like the phenomenon of the iPod selling Mac computers. Add to that the highly competitive pricing of the low-end model of the Xbox 360 (you can get it for $200 here in the U.S.), and you can only come to one conclusion: Sony's PS3 needs some sort of new strategy, a makeover even, to get it back on top of the video-game heap. I'll present a few thoughts, suggestions if you will, on how Sony's management can turn things around.

To begin with, an entirely new advertising campaign needs to be built from the ground up. And it needs to be aggressive and attacking. Specifically, Sony needs to link the Wii to childish gaming. We all know that isn't true, but Sony would probably benefit by trying to convey an image of superiority and maturity over its biggest rival. Imagine television ads that specifically show goofy, nerdy, unpopular kids/adults playing the Wii, and then juxtaposing such scenes with cool hardcore gamers having fun on the technically advanced PS3. Maybe an ad might show someone falling flat on their face while using the Wii Fit board. The Wii users could then be portrayed as being jealous of their PS3 counterparts. The tag line could go something like "Don't you feel a Wii bit stupid? Be a winner. PlayStation." If Sony can turn the Wii into a fad device that no self-respecting individual would want to own, then it might increase its console sales.

But, we can't stop there. The makeover has to continue. And I would take a radical step with this next suggestion: ditch the Blu-ray player. I know, I know, if Sony does that, then a big chunk of its business model with the PS3 goes out the window. Management would essentially be admitting defeat on the linkage of the prized new-format paradigm and gaming. And to tell the truth, I've always argued that the Blu-ray functionality is an asset to be promoted to potential buyers. Yet, if Sony is to think outside of the box that it's created, then maybe it should take Blu-ray out of the PS3 box. Come on, what else should Sony do? That would obviously allow a nice price reduction for the system, and that would mean things would heat up in terms of competition. It would give Sony a fighting chance. Plus, it would encourage Sony to focus on video games. Why let users be distracted by movies? Oh, and while I'm at it, let's mention that huge hard drive. Do what Microsoft has done: create at least one low-end model that has no hard drive but does contain a memory unit. Sure, that will interrupt plans for domination of the living room via a multimedia hub of Sony's design, but so what? Maybe consumers aren't ready for their living rooms to be monopolized in such a manner.

Sony could do more things if it really wants to stay in the game. How about create an online service that would act as a killer app for the PS3? You know that one of the biggest selling points of the Xbox 360 franchise is the Xbox Live product. On an anecdotal level, hardcore players love it and use it. I don't hear much about Sony's online platform. Sony is, I should point out, working on the PlayStation Home experience, which is supposed to be an impressive virtual community for gamers, so perhaps the company will succeed with that, who knows (I have my doubts). Another thing the PS3 needs is its own Mario-like character. Sony does have some great, successful intellectual properties for the PlayStation universe, such as Jak & Daxter and Ratchet & Clank. But can these characters compare to trademarks such as Mario and Donkey Kong? What about Sonic? I think Sony could work on this aspect as well.

And that point naturally leads into this one: how can Sony convince parents to pony up for the PS3 instead of a Wii? Simple: make (or encourage third-party publishers to make) more games for kids! Really target the five-to-seven-year-old demographic. Make the games simple to play, don't make the mistake that just about every software publisher makes when it programs a title that is geared, at least in part, to a kid. Seriously, how many kids have problems finishing Super Mario Galaxy? A lot. As part of any makeover, I would suggest to the powers that be that every game designed for the younger set come with an easy version that will prevent players from getting stuck (come to think of that, I myself would like that option as well, as I feel video games are, in general, too tough anyway). There is a justifiable stigma attached to both the Xbox 360 and PS3 when it comes to their kid-friendliness. Sure, both do have games that skew toward the young, but the Wii has them both beat on this count.

Sony needs to mutate, to change its video-game DNA to enhance its brand fitness so that it may once again regain its title as the champ of the entertainment console. It should attempt to reduce the price of the PS3 in any way possible, and it needs to draw a clear line of differentiation between itself and the main enemy, the Wii. It can be done. It just takes a lot of hard work and rock-solid marketing muscle. The game isn't over yet, Sony...

UPDATE: I've received many comments regarding my notion of removing Blu-ray technology as part of a makeover of the Sony PlayStation brand. I would like to clarify my thoughts, as admittedly, I did a bad job in terms of being clear. In my opinion, Sony included Blu-ray as part of the PS3 system mostly for pushing that format as a new paradigm for movie-content distribution on physical media (i.e., to win over HD-DVD). I do not believe video-gaming was at the forefront of the minds of the execs (again, just my opinion). It is true that my suggestion would cause a radical technological disruption to the current PS3 strategy, but my makeover thought experiment was intended to be that -- radical. I wanted to express an idea of how to change the current PlayStation paradigm almost from the bottom up.

Microsoft has gotten away with DVD media, and the Wii has gotten away with innovation over technological superiority. But I did not acknowledge the inextricable link between Blu-ray media and current PS3 design, and I should have stated that directly; and, yes, at this point, my suggestion would probably only have academic value at best, I concede. I know this addendum won't be satisfactory to most, but I wanted to present it nevertheless to the people out there who have taken the time to read and comment on my thoughts.

Disclosure: I don't own any company mentioned; positions can change at any time.

Does the PlayStation need a makeover? What would you suggest? Be sure to check out the other makeover posts.

Tags: Donkey Kong, jak and daxter, makeover, Mario, Nintendo, Nintendo DS, PlayStation 3, ratchet and clank, SNE, Sony, Wii, Xbox 360

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Reader Comments (Page 3 of 3)

11-02-2008 @ 4:11PM

omar said...

Dont now what people are talking about. i love the PS3 and i own all of the three consoles. The wii is fun but does not have a great game selection and it also gets old after a while. The xbox is great but has no wireless connection for xbox live unless u buy the wireless device for an extra $100. The ps3 has built in wireless connection free online play and you can surf the internet on it. The blu ray player is a plus and looks great on my HD LCD tv. All i can say is that i use my PS3 more than the others and it was worth the price.

11-01-2008 @ 10:43PM

Ashram said...

pwd5775 said: "Sony needs to ensure that the PS3 is backwards compatible to play the PS2 games. There also needs to be a way to use the PS2 memory cards with the PS3. These issues, and the sell price, are what are keeping me from buying a PS3."

The PS2 had some problems playing certain PS1 games, just as the PS3 may have the same issues with some PS2 games, either with the PS2 hardware in the earlier generation PS3 consoles or PS2 emulation in select newer models of PS3 consoles (the higher end models have PS2 emulation while lower end models eschew this as a cost-cutting factor).

But, there is a PS2 memory card reader that is sold as a separate accessory for PS3 machines that have PS2 support. You merely connect the PS2 memory card reader to a USB port on the PS3 and this enables reading and writing of a PS2 memory card.

11-02-2008 @ 9:19PM

Jon said...

I have a 42 inch Sony HD 1080ip LCD wide screen TV with a Yamaha suround sound system with my Xbox 360 & a Sony blue-ray player. It is wonderful, & I recomend that anyone who wants the full efect of what the Xbox can produce try it. You can do it slowly, but I do think you should start with a TRUE HD TV it is outstanding!!!
I have always been a playstation person & have the PS 2 also hooked up. I do not think you can go wrong no matter which one you chose.
The Wii on the other hand is 100% for children. It is great that they have something for that age group & that is why the sales are the way they are.

11-05-2008 @ 12:03PM

brian s. said...

good idea with the price... especially when it comes to that huge hard drive. they need a lower priced model with a reasonable amount (1gb? 2gb?) of flash memory built inside and expandability through add-on memory. but BluRay is certainly here to stay - at least when it comes to the PS3. it's a fundamental part of the architecture of the machine, and the games are all BluRay discs. there's no changing that just to discount the model at all.

and no matter what, the more they sell (over time), likely the more the price will naturally drop... it's simply economy of scale. it just hasn't happened as quickly as some consumers would probably like.

11-12-2008 @ 2:46PM

Damon said...

Wow I was really expecting more from this article when I started to read it. The reason the Wii is so popular is that it is an easy system to use. It is a system that anybody can pick up and play. However comparing it to the 360 Arcade it is overpriced and is very lacking in features and games. However, the 360 Arcade is a major rip-off by MS, because it is a system that is unable to play most of the games due to not having a hard drive. It is even almost unable to use the new dashboard due to memory requirements. If you get a 360 and make it comparable to all the features on a PS3 (Wi-Fi, upgrade to high end DVD –Blu-ray on PS3 and HD-DVD on 360, similar sized Hard drives) they are almost the same price.
If you really wanted to make over the PS3 you should go back to the 60GB HD model (due to it having almost full backwards compatibility), remove the Wi-Fi capabilities, and add a USB port in back so that you can make Wi-Fi optional. Additionally, you should change the HD to a 40GB, with clearer instructions on how to upgrade your HD. 5400rps (no more or it will add too much heat), 2 1/5” SATA drive with at least 8MB buffer. The nice thing is that this can be purchased online cheap. I just upgraded my PS3 HD to 320GB for only $70. Very different to the $120 or so I spent on the 120GB HD for my 360. This way you save money on the basic HD and promote users to find a cheap upgrade on their own if they want it.
These changes will allow the PS3 to drop some in price between $50-100. It would be better to drop it by $50 and include two older games. That way you have a system that is $50 more than a 360 Pro, with Blu-ray and two games.

11-29-2008 @ 3:18PM

glenn said...

This guy needs a reality check. Comparing the Wii and the Playstation is like comparing an Aveo and a Corvette. They are meant for people in different stages of life, one is an entry level, and the other top of the line.
As far as making fun of the Wii? PS3 users have a host of terms meant for the Wii users, including 'Wii-tard'. Using it as a marketing technique is, simply, childish.
My wife and I are beta-users of 'Home', the new, free, live, live interactive world. You have your own 'house',can shop, watch and download multimedia (movies, games, etc..), converse with friends, etc...It isn't finished yet, but it is already unlike anything else out there.
It is true that the Blu-Ray player adds a lot of cost, however, a few of the games are running on a Blu-Ray platform, and they are truly incredible. More games are planned for Blu-Ray, and it's likely that is the future of the PS3 game.
PS3 offers a free network, most games offering free voice chat, and the network offers downloadable content, some free, as well as video chat with friends.
The large hard drive, any PS3 player will tell you, is necessary. People who install more than 10 games will find that a 60 gig hard drive is likely not enough.
Buying games is not necessary, in two ways. First, PS3 network, which is free, allows downloads of free trials of games. Users know, in advance, which games they are really interested in, saving money on new games. In addition, subscribing to a game rental site allows you to 'test-drive' a game. If you don't like it, send it back. If you do, you've got the option to buy, at what ends up being a 30-40 percent savings.
PS3 is fine the way it is. It was meant as a next-generation console, for serious, adult gamers. Adults like toys too, especially the Atari generation. We shouldn't be stuck with a childish toy just to console a critic who clearly doesn't understand serious gaming.