Those who keep vigilant watch over the competition among the leading corporations, which provide game consoles, Sony, Nintendo and Microsoft, have already noticed that not all of them meet competition and the profits of the companies vary due to sales impact. For a long time Sony released video game consoles that brought about $ 2.2 billion (Timmer). However, today sales of Sony’s Playstations have decreased dramatically, giving way to those of Nintendo and Microsoft, Wii and X-box 360 respectively. If to analyze the reasons of this phenomenon, one can distinguish several factors.
First of all, Sony Playstation 3 belongs to the seventh generation, which means that it should differ much from the previous game consoles and offer a far broader range of functions that Sony Playstation and Sony Playstation 2. However, despite innovations, sales of PS3 have fallen. Market experts claim that this happened because other companies offer more interesting options than Sony and thus attract customers. In 1995 and 2000 PS and PS2 made a breakthrough at the video game market and won a large audience. Today a lot of video games fans have Sony Playstations of previous generations, while new PS3 does not offer anything attractive to make owners of PS and PS2 buy a new version.
Meanwhile, Nintendo focuses on radically new opportunities for gamers and offers Wii, which has a motion sensing wireless controller.
With its help the user can manipulate different objects on the screen by gestures. Together with a wide range of games and other functions similar to the ones of PS3 and X-box, Wii becomes a serious competitor and comes out on top of sales. X-box also tries not to stay behind and attracts customers with the variety of games which outnumber PS3. Thus, we can state that the first reason of Sony failure is lack of diversity.
It goes without saying that any company aims to attract as many customers as possible and embrace as large audience as possible.
Therefore, every detail of the product is developed thoroughly, taking into account the preferences of people. The customers might be divided into two groups ”“ experienced sophisticated gamers and average users. Those who are fans of games and place graphics and number of games over other functions might choose PS3, though it does not differ much from the previous Playstations and Microsoft offers more games. Those who are not so selective pay attention to design and to some special effects, which are provided for example by Nintendo.
Analytics keep paying attention that Sony products are aimed at very narrow sectors of public. Thus, for example, SP3 can export video in high definition but as it is available only for those who have a high definition TV, many people cannot appreciate the full potential of the console. The range of games also covers only a limited group of people, as many of them are first-person shooter games. Thus, we again see that Sony products can not offer as many different variants of products as people need. Nintendo of America president Reggie Fils-Aime claims that “From our perspective it all comes down to the games. It all comes down to the best software available” (Benedetti).
Another important factor of Sony’s lag is the industry shift from analog to digital technologies. While Sony was the leader in production of analog consoles, digital devices can be mass produced and thus can be made by any company. Thus, now there is a wide choice of game consoles available for customers and since the best of them are very close in their quality, another factor appears ”“ the price.
The price of a product is always important for customers and in many cases it plays the decisive role. Together with quality and particular functions people always take into account the cost. Therefore, sales analysts study the market, purchasing capacity of customers and competitiveness of the product. If to compare the prices for PS3, X-box and Wii, we see that Sony Playstation 3 is the most expensive, though today it does not meet all the requirements of customers. Meanwhile Nintendo offers quite acceptable prices and thus attracts both fans of games consoles and non-experienced people, using consoles in their leisure time. It is obvious that Sony planned to earn as much money as earlier with the help of PS3 but it could not hold its ground. Besides, lowing prices by turn, electronic companies heat up the competition and make each other consider the consequences in order to stay on top. “No matter what Nintendo does or does not do, the console horse race has gotten a whole lot more interesting now that Sony and Microsoft have cut prices on their machines” (Benedetti).
To make a conclusion, severe competition among the leading corporations makes them introduce more innovations and revise their prices again and again. In order to be in popular demand Sony, Microsoft and Nintendo have to take into account all the preferences of customers and embrace as large sector of public as possible. Having analyzed current situation at the market, we have seen that PS3 is behind its competitors Wii and X-box. Its sales have plummeted mainly due to high prices, lack of diversity and orientation on a narrow sector of public. Today Wii offers a friendly design and a remote controller together with first-class games while Xbox, being as powerful device as PS3, provides customers with a great variety of the latest games together with large downloadable content.