General Overview Playstation 3 released November 17, 2006 Pricing New innovations Results Competitors sales New “Slim” model -our product is the PS3, made by Sony -part of the gaming industry, with competitors Wii and Xbox360 -introduce features, change in marketing, slim PS3 is made by Sony, it’s a entertainment center. Its part of the video game industry with competitors such as Microsoft xbox 360, And Nintendo Wii

Early Production Sales and Production Intial production costs approximately $800-850 Retail price $499-599 Sold at a loss to encourage repeat customers through the sales of individual games -High production cost, high price -Gaming consoles are usually sold at a loss -Hope to break even and then profit on individual game sales and reduced manufacturing costs as technology improves http://en.wikipedia.org/wiki/Ps3   Sales & Production Initial production costs were appx. $800 - $850, with a retail price of $499 - $599. The units are sold at a loss, probably to achieve repeat customers through sales of individual games. The production costs came down to $250, with retail prices of $249.99. Lots of other info too, a whole section at the end called ‘Reception’ which talks about how the PS3 has been received by critics and consumers.

“It Only Does Everything” Technological Advances An “all-in-one” device Features include: Blu-ray player Gaming system Free wireless networking Multimedia download capabilities -Using technology to gain an edge over competitors -Blu-ray player, gaming system, wireless networking -New marketing strategy to sell an “all-in-one” device -Attempt to tap into new customer base, non-gamers or infrequent gamers might use other features http://latimesblogs.latimes.com/entertainmentnewsbuzz/2009/08/sony-repositioning-playstation-3-as-allinone-entertainment-device.html   This article is about Sony attempting to recreate the image of the PS3 as an ‘all-in-one’ entertainment device. I forgot about the new commercials they have until I saw the image on the website. There is a focus on the Blue-ray and movie download capabilities, and targeting the product to ‘moms and families’. “Although the PS3 arguably offers more features than its competitors, the company hasn't been able to excite consumers about free wireless networking and multimedia downloads. Dille said that the campaign, Sony's biggest and costliest since the launch of the PS3, is designed around the idea that Americans are now more interested in those capabilities.”

Introduction of the Slim Model Recently, Sony released a version of the PS3, called “the slim model” It has reduced the cost to purchase a PS3 to $299 This has caused a huge increase in sales of the PS3 for the Sony Corporation. -Sony released a smaller model of their PS3 -They also reduced the retail price of the unit by 25% to $299 -The sales of the PS3 have lagged behind the Xbox 360 and the Wii -They are hoping to increase market share with a new model and lower price point http://www.gamesindustry.biz/articles/retail-praises-sonys-excellent-ps3-price-point   Sales & Production Sony lowered its retail price of the PS3 to $249.99 , which had the effect of increasing sales up to 15 times. Sales also “soared” with the release of the PS3 slim model. “It’s an excellent price point…making the product affordable.” http://www.gamesindustry.biz/articles/playstation-3-sales-rocket-1000-percent-on-slim-release “Sales of the PlayStation 3 have rocketed over 999 per cent in the past week, shifting eleven times the number of units sold the prior week.” “Chart-Track also said that last week the PS3 outsold the DS, Wii and Xbox 360 by approximately 3:1.”

Innovation Pays Off Reduced Cost 70% First full week sales up 740% over previous weeks In UK PS3 out sells all systems 3:1 since release Five of top ten anticipated games to be released are for PS3 US PS3 Sales up 300% -Over the life of the product, Sony has reduced mfg. costs by 70%, to $300 -Sony realizes huge increase in sales with the price drop and introduction of the ‘Slim’ -Sony is also hoping to capture market share through upcoming blockbuster game titles "Our top retailers have reported a 300 percent lift in PS3 hardware sales, and an increase of 140 percent in total hardware revenue across the PlayStation portfolio when comparing the first week of September to the week before the USD 299 price adjustment," said Sony in a statement. http://www.gamesindustry.biz/articles/us-ps3-sales-up-300-percent   Sales & Production US sales of PS3 up 300% with the release of the slim and the price cut. “The company also pointed to a recent survey by OTX GamePlan Insights which showed that five of the top ten most anticipated games by consumers are on the PlayStation 3 format…” Having top games may also help increase sales of the gaming unit. http://www.gamasutra.com/php-bin/news_index.php?story=25223 Pretty long article, but it talks about Microsoft and Sony both still feeling losses, due to lower than expected product sales of the PS3 and the Xbox 360. It mentions that one of the things they could do is offer a wider priced range for games, having shorter or lower end games released in the $5 - $20 range, with blockbusters remaining at the $50 - $60 range. They mention how inexpensive it is to produce CD’s and DVD’s now and that the price structure is unsustainable. It also talks about how people can get game content from many sources; through their phones, on the internet, through social networking sites. Much of that content is inexpensive or free, so how can Sony and Microsoft maintain market share?

PS3 Sales Rise Above Competitors -Information collected from VGChartz.com which tracks weekly sales volumes of gaming units -Chart clearly shows the huge bump PS3 had with its price drop and the slim model -We can see the numbers are coming back down after the initial bump -Will the PS3 maintain higher sales numbers coming into the holiday season -There is already talk of a ‘price war’, with Xbox360 and Wii talking about comparable price drops http://www.vgchartz.com/weekly.php   This site has a graph showing weekly sales of each gaming unit. It shows that sales for the PS3 were 550,256 units last week, which is an increase of 409%. It also shows total units sold, which is currently about 24 million. The charts also show games sales, and you can look back week by week for historical data. I’m going to try to put week by week numbers into Excel to get us some nice graphs that track the sales volume. Maybe we can put some notes in, like when the sales spikes due to price drops or new models released, etc. http://www.vgchartz.com/ This is the main page for the site above, with a nice bar graph on the top that shows total units sold of each gaming system. http://247wallst.com/2009/09/23/playstation-3-sales-up-300/ Mentions the lower sales numbers because of the recession, and how the big three are gearing up for a price war for this holiday season.

Summary PS3 recently shifted its marketing focus to “total entertainment solution” With the introduction of the slim model, they have seen significant increases in sales of the console. Their new marketing focus is proving to be successful. -The introduction of a new model and new marketing strategy appears to be working -Will these numbers hold up -Only time will tell in the coming months if they will continue to see increased sales numbers -How will the competition react, and what effect will that have on Sony -From 2007 to 2009, Sony had an operating loss of $3 billion that they are still trying to recoup PS3 marketing shifts focus to 'total entertainment solution‘ http://www.joystiq.com/2009/08/31/ps3-marketing-shifts-focus-to-total-entertainment-solution/

References http://en.wikipedia.org/wiki/Ps3 http://www.gamesindustry.biz/articles/retail-praises-sonys-excellent-ps3-price-point http://www.gamesindustry.biz/articles/playstation-3-sales-rocket-1000-percent-on-slim-release http://latimesblogs.latimes.com/entertainmentnewsbuzz/2009/08/sony-repositioning-playstation-3-as-allinone-entertainment-device.html http://www.gamesindustry.biz/articles/us-ps3-sales-up-300-percent  http://www.vgchartz.com/weekly.php http://www.joystiq.com/2009/08/31/ps3-marketing-shifts-focus-to-total-entertainment-solution/