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Sony Corporation and the Video Game Console Market: A Competitive Analysis

This is a research report on Sony Corporation and the Video Game Console Market: A Competitive Analysis uploaded by Ayesha Shaikh in category: All Documents »  Case Study »  Cases in Marketing section of our research repository.
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Tags: EXECUTIVE SUMMARY , The Market for Video Game Consoles is Growing , but Competition is Fierce , Sony’s Current Strategy Relies on Making Blu-ray the Standard for Optical Storage , Price Is a Significant Barrier to PS3 Console Adoption
Sony’s current strategy in the video game console market is simple: use the technologically
superior Playstation 3 as a loss leader to introduce the Blu-ray optical drive
into consumers’
homes and leverage that market penetration to drive content sales once Blu-ray is established as
the de facto standard for optical storage. It is therefore in Sony’s interest to reach the tipping
point for market adoption of Blu-ray as soon as possible. To increase the rate of Blu-ray
adoption in the market, we recommend that Sony adopt a “good-better-best” strategy, whereby
Sony produces discounted and premium versions of the current Playstation 3 for sale to
consumers. This strategy will encourage price-sensitive customers to purchase Playstation 3
consoles without marginalizing power gamers. Nintendo and Microsoft will most likely respond
to this strategy with differentiation rather than price competition. If Sony reinforces this strategy
with coherent marketing and intellectual property strategies, it can increase Blu-ray adoption
rates and make it more likely that the format will be adopted as a standard.


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