Value Analysis Assignment Conor Kelleher 11/17/15 “I understand and will uphold the ideals of academic honesty as stated in the Honor Code.” Conor Kelleher .
After the overwhelming success of Sony’s Playstation 3 (PS3) video game console, it was only a matter of time before speculation began as to what product would come next. Released in November of 2013, seven years after the release of the PS3, the Playstation 4 introduced the world to a new era of “next gen” gaming. Developed, designed, and manufactured by Sony Computer Entertainment, the PS4 changed not only the gaming industry, but the entertainment industry as well. The gaming industry is familiar to Sony, and the Playstation 4 is not a new idea, but merely a Product Modification. The vast improvements that the PS4 boasts over its predecessor make it a top option for anyone that is looking for a gaming console as well as a media player. Sony focused on three major things when choosing how to market their product, including their product strategy, marketing mix, and value analysis. A company’s product strategy studies the features and benefits of a new product in comparison to the previously available product options. When trying to market a product, it is very important to understand what distinguishes that product from not only competing products, but also from the previous version of that same product. Although the Wii U as a console is a viable option for some specific demographics, the only real product competition that Sony faces comes in the form of Microsoft’s Xbox One. There are several key factors to take into account when trying to differentiate between the two products, including hardware specs, software specs, and features such as consoledependent downloadable content or exclusive games. The Playstation 4 has 10% better graphics capabilities, but 10% less processing power than the Xbox One.1 The significant amount of RAM available on PS4 certainly tips the scale in its favor when it comes to hardware, while the higher resolution and speed mean that Sony’s console also wins out over Microsoft’s console when it comes to software specs. Outside of these measurable factors, there are a number of factors that can’t be measured because they are simply matters of opinion. Although most famous games are created for and released on both consoles, games that
Swider, Matt. "PS4 vs Xbox One: Which Is Better?" TechRadar . Future Plc, 4 Nov. 2015. Web. 14 Nov. 2015.
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are exclusive to a specific console are becoming more commonplace. To Microsoft and Sony, these exclusives are what can separate the consoles, and both companies invest heavily in developers that will make games specifically for their console. The differences between the Playstation 3 and Playstation 4 are obvious, and there are upgrades in nearly every major aspect of the console. Hardware and storage capabilities increased, processing speeds and graphics increased, and Sony chose to plan for the future by making a lot of their software and hardware easy to update. The target market for Sony’s Playstation 4 is expansive and specific to the type of person that interacts with technology on a daily basis. In general, the PS4 is aimed at gamers (casual and competitive) and people who use media platforms such as Netflix, HBO, Spotify, or even ESPN. The ease of use and compatibility of the Playstation 4 allows it to fit into almost any home and add something positive to it. Sony applies the marketing mix very well when it comes to their leading gaming product, the Playstation 4. The first P, Product, I explained in the previous paragraph, and studies the specific benefits that the PS4 has in comparison to its competitors. The second P of the marketing mix, Price, is fairly interesting in the gaming console market due to its lack of variance. The PS4 is priced at $349.99, which, although it includes a game, is a steep price to pay for something that many parents brush off as time wasting. Sony understands this, and focuses their sales and promotions around times when gifts are being bought and money is being exchanged, specifically the holiday season. The third P of marketing, Place, is self explanatory for the Playstation 4, as it is sold anywhere that consumer electronics are. The fourth P of marketing has been a huge focus for Sony in recent months, and the Promotion of the Playstation 4 has been essential in its success. Between January and May of 2014, Sony spent $59 million on TV advertising alone, showing just how committed they are to reminding everyone which company makes the best next generation gaming console.2 2
Usher, William. "Sony Has Spent $59 Million On PS4 Ads In Five Months | CINEMABLEND." Sony Has Spent $59 Million On PS4 Ads In Five Months . Cinema Blend, 29 June 2014. Web. 14 Nov. 2015.
Next generation gaming consoles are for more than just gaming, and the presence of significant entertainment features gives the Playstation 4 more value than any console has had before it. It offers something significant for everyone, and it’s up to the owner of the console to decide how much money they want or don’t want to put into it. If one were to buy it for its primary function gaming then the base price is all that one would have to pay (other than the games). Subscription fees for multiplayer and some entertainment services are other add ons that add value to the product. There is no question that Sony is currently winning the “console war” when it comes to sales, and the value that a Playstation 4 offers is clear in its superior hardware, software, and exclusive games and services.
Appendix A: Product’s features Name
Description
Benefit
Dualshock®4 Wireless Controller
The latest Playstation console comes with the latest Dualshock 4 controller, featuring easy touch sharing at your fingertips, a smart interactive lightbar, and a microusb charging port.
More consistent button and analogue accuracy Longer battery life Central touchpad and microphone More comfortable design
Playstation Network users can now use the console’s chat feature to talk to friends, even if they are not in the same game. This feature helps users stay connected to their friends.
Increases the social aspect of playing video games, especially if the chat can be hands free and consistent Makes playing in games with friends easier, regardless of whether you are in the same game or not.
Users with a smartphone can download a free Playstation App that can do a range of things, from messaging friends over chat to checking one’s progress on a game.
Makes it easier for users to stay connected to the brand of Playstation without actually interacting with a new physical product Instead the application can interact with the product and tell it what the user wants
Users are now able to run multiple apps at once, switching between two or three applications seamlessly without having to close the applications and lose the progress made.
Can easily listen to music while playing a game Able to stop playing a game to watch a movie, then return to the game without having lost the game save
Crossgame Chat
Mobile App
Multitasking
*All information in this Appendix was obtained from the website of each company: http://www.playstation.com
Appendix 2: Product’s competitors Product
Price
Unique Features/Benefits
Sony Playstation 4
$349.99 for a bundle (Includes a game)
User upgradeable Hard Drive 8GB GDDR5 RAM 176 GB/s Bluetooth capable Highest graphics capabilities of all consoles
$349.99 for a bundle (Includes a game)
Best motion sensing video game software (Kinect) Groundbreaking and sought after exclusive games Highest processing power of all consoles
Microsoft Xbox One
Microsoft Xbox One Elite
$499.99
1 TeraByte Solid State Drive Xbox “Elite” controller Controller carrying case Heavily targeting the more competitive gamer
Nintendo Wii U
$299.99 for a bundle (Includes a game)
Interactive handheld console in addition to a controller Up to 8 controllers can be connected More casual, arcade style games Many exclusive classics, such as Mario
*All information in this Appendix was obtained from the website of each company: http://www.playstation.com http://www.xbox.com http://www.nintendo.com
Appendix 3: Product sales data
*All information in this Appendix was obtained from the website below: http://arstechnica.com/gaming/2015/07/analysissonypushespast50percentoftheworldwidec onsolemarket/
References Gilbert, Ben. "The PlayStation 4 Will Be $300 for One Day Only next Week." Tech Insider . Business Insider, 3 Nov. 2015. Web. 13 Nov. 2015. Haywald, Justin. "Advantage PS4: Why Sony Is Winning the Console War." GameSpot . CBS Interactive, 2 Mar. 2014. Web. 14 Nov. 2015. Mochizuki, Takashi. "Sony Cuts PlayStation 4 Prices." WSJ . The Wall Street Journal, 8 Oct. 2015. Web. 14 Nov. 2015. Orland, Kyle. "Analysis: Sony Pushes past 50 Percent of the Worldwide Console Market." Ars Technica . Condé Nast, 30 July 2015. Web. 15 Nov. 2015. Swider, Matt. "PS4 vs Xbox One: Which Is Better?" TechRadar . Future Plc, 4 Nov. 2015. Web. 14 Nov. 2015. Usher, William. "Sony Has Spent $59 Million On PS4 Ads In Five Months | CINEMABLEND." Sony Has Spent $59 Million On PS4 Ads In Five Months . Cinema Blend, 29 June 2014. Web. 14 Nov. 2015.