Sony Strives To Be Market Leader In Alienating Consumers

Well, the Australian ones, anyway.

Sydney Morning Herald: Sony customers still waiting for free PS3s

Sony Bravia LCD TV buyers have been waiting for up to four months for the company to make good on its promise to give them a free PlayStation 3 games console.
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Between December 21 last year and January 28, Sony promised that anyone who bought a Bravia high-definition LCD TV set would receive a bonus PS3, as long as they had their receipt and could cite the TV's serial number.

Vendors love rebate offers because less than 15% of consumers send in their rebate form, and consumers hate rebates because of the hoop jumping, delays, and often impenetrable fine print involved in claiming them.

But people are apt to get a lot more militant about a Playstation3 that never arrives than a $10 cheque for buying a thumb drive.

Here's a hint: logistics people need to sit down with the marketing people, go over their forecasts, and then earmark an appropriate number of units into allocation just for the freebie offer. Maybe Sony Australia did all that, and still came up short, but they're not talking.

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Playstation 3 gains ground at Christmas

More good news for Sony and for Blu-ray.

Mercury News.com: PS3 holiday sales total 1.2 million

TOKYO—Sales of Sony's PlayStation 3 game machine sales totaled 1.2 million in North America during the key holiday season, the electronics and entertainment company said Monday. The performance gave a lift to its Blu-ray video format because the console also works as a Blu-ray player.
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Nintendo said previously it had shipped 13.2 million units worldwide of the Wii by October. The Kyoto-based maker of Pokemon and Super Mario games is expectingto sell a cumulative 23 million Wiis by March 31, the end of its fiscal year. Sony has said previously that it sold 5.6 million PS3s worldwide as of the end of September. The latest will add to the tally but the company did not yet have the numbers from the other regions.
The PS3 has lagged behind the Xbox 360 console from Microsoft, which has sold 17.7 million Xbox 360 consoles globally over the last two years.

Despite the fact that I love indulging my sense of schadenfreude when Sony miss-steps, I have to say that it is a relief to see Blu-ray start to gain ground, considering that I called the format war in their favor last October.

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Playstation3 sales up 298%

In case all you think I ever do around here is mock Playstation 3, here's some upbeat news for a change:

GameDaily: PS3 Sales Up Nearly 300% Since November 2

Sony Computer Entertainment America (SCEA) sent along some sales data today for how its PlayStation business fared last week at the "top 10 retailers" in North America, including the busy Black Friday shopping period. As a whole, PlayStation brand unit sales during the week increased by 178 percent and sales dollars increased by 154 percent.
Furthermore, Sony said that on a year-on-year basis, PS3 hardware sales were up 245 percent compared to Black Friday sales last year. And since November 2, when the new 40GB SKU and thereduced in price ($499) 80 GB model both were available, Sony said PS3 hardware sales are up 298 percent.

I'm going to forgo the obvious jokes about multiplication by zero and instead say good for them, although they still have a long row to hoe before their Installed Base of PS3-as Blu-ray players becomes large enough to call the format war in Sony's favor.

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The console wars, simplified

Compare and contrast:

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Sony cutting Playstation 3 price in time for Christmas

Marketnews: Sony Drops PS3 Price Again

Just in time for the upcoming holiday season, Sony Computer Entertainment America Inc. (SCEA) has reduced the price of the 80 GB PlayStation 3 (PS3) gaming console by $160 to a more attractive price point of $499. The 80 GB version of the console was introduced in August at a retail price of $659, at which time the original 60 GB edition was reduced by $100 to sell for $549. As of November 2, SCEA is replacing the 60 GB model with a new 40 GB version that will sell for an MSRP of $399.

Last year the core gamers all bought theirs. Is this price cut enough to push casual gamers over the edge?

Better yet, will a lower price point PS3 be bought in droves as a Blu-ray player for people's home entertainment systems, and pooch sales of Sony's CAD $599 BPDS300 player?

Anyone care to guess?

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Analysts see soft Christmas for Nintendo, even worse one for Playstation 3

There are those industry watchers who predict that the sun is setting on Nintendo's upstart dominance with the Wii.

The Retail Bridge: Is Nintendo's Run At The Top Coming To An End?

Nintendo's Wii video game console was the surprise hit of the 2006 holiday season and spent most of this year at the top of sales charts and industry reports.
But, according to a pair of analyst notes released this week, the company's stint ahead of the video game pack may soon be ending as Microsoft's Xbox 360 is expected to roll through the rest of the year.
Why? The recent release of Halo 3 has more than a little to do with it."We believe Halo 3 will spur sales of Xbox 360 consoles and Microsoft should be able to sustain this momentum with a strong release slate via-a-vis the Xbox 360," Kaufman Bros. analyst Todd Mitchell wrote earlier this week.

On the other hand, industry watchers were wrong about the Wii going into last Christmas, so go figure.

To put a silver lining on that dark clound, they also think that Playstation 3 sales will continue to suck.

And so far analysts expect Sony's Playstation 3 to be little more than an also-ran this year, still suffering from the expensive console's overall lack of compelling content.
"Sony is facing a worst-case scenario this holiday season," Mitchell said. "Not only are there fewer titles to drive PS3 sales, but problems with major releases, such as Madden NFL 08 and Lair, show developers are still having a difficult time with the platform. The loss of high-profile exclusives, such as GTA IV and Assassin's Creed, means that there is a very little to drive incremental PS3 sales."

Personally, I think that this Christmas season in CE is shaping up to be a real nail-biter!

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Sony slashes price of PS3, decides it needs to lose more money

Make sure you read all of Roger Ehrenberg's insightful commentary on Sony's announced price cut on the Playstation 3.

Information Arbitrage: Sony Cuts the Price of PS3? In the Right Direction, But...
So Sony, sure, go and engage Microsoft in a race to the bottom (of profits, that is). You are still missing the big picture. It's the product that needs work, guys. Not just the price that needs lowering.


If your product is great, you sell on its value. If your product is not so great, you have to sell it on price. Bottom line, if the PS3 was all that it was supposed to be in the first place, it would have been good enough to not need a price cut to kick start greater adoption.

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Nintendo spanks Sony at market capitalization, too

Bloomberg: Nintendo Tops Sony's Market Value as Wii Outsells PS3
Nintendo Co.'s market value surpassed that of Sony Corp., a company with eight times more revenue, underscoring the success of the Wii game console in outselling rival PlayStation 3.
Shares of Nintendo, based in Kyoto, western Japan, rose to a record 46,350 yen, valuing the company at 6.57 trillion yen ($53 billion), and overtaking Sony's 6.48 trillion yen capitalization in trading today. Nintendo's stock closed 0.8 percent lower at 45,100 yen.
Sony, which overtook Nintendo as the world's biggest console maker after PlayStation 2's introduction in 2000, suffered production delays and slow sales at its latest player. Wii's lower price and a wand-like controller that players swing like a sword or tennis racquet helped Nintendo widen its sales lead over the PlayStation 3 in Japan last month.
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Nintendo's sales in the U.S. have not reached their potential, spokesman Toyoda said last week. The company has in the past sold about twice as many consoles in North America than in Japan or Europe, he said.
Nintendo has so far sold about 2.37 million Wii consoles in the U.S., 2 million in Japan and 1.47 million in other regions, including Europe, since the November debut, he said.

What a topsy-turvy world we live in. First Hyundai gets the nod as top car brand for quality, and now Nintendo has eclipsed Sony for market cap. At the moment, the phrase "totally eating Sony's lunch" is metaphorical, but how long before it becomes literal?

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Sony cutting back US PS3 division

TWICE: Sony PS3 Division Announces Layoffs

Tokyo — Sony Computer Entertainment today announced personnel cut backs in its North American operation as part of a plan to reorient its PlayStation3 business as a network centric gaming device.
According to published reports, Sony has not released the number of U.S. jobs to be eliminated nor whether there would be cutbacks to follow in Japan. The gaming unit employs about 1,500 people in the United States.
Sony underwent a round of layoffs in April when it let go about 10 percent of its European work force.



I don't consider this to be a "the sky is falling" event, although tying it to a "reorientation" of the Playstation 3 towards greater network centricity sounds like a pretty big red herring thrown to the press.



There's nothing ominous about streamlining your organization, per se (unless you're one of the people who get streamlined!). Truthfully, a big corp like Sony usually has more than enough excess to trim in any one division.



That said, I just found this awesome image via Google image search, and am just itching to use it:



Hat tip to Kotaku for the image.

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In Japanese market, Nintendo Wii totally outsells the Playstation 3

Reuters: Nintendo Wii outsells Sony PS3 5-fold in Japan
TOKYO (Reuters) - Sony Corp. took another blow with Nintendo Co.'s Wii game console outselling its PlayStation 3 by more than five to one in Japan last month, raising doubts over Sony's nascent earnings recovery.

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Sony sold 45,321 units of the PS3 in May, compared with 251,794 units of the Wii. In April, the ratio was four to one in favor of the Wii, according to Japanese game magazine publisher Enterbrain.

I can't help but wonder how human target Sony PR head Dave Karraker is going to spin this to look like a win for Sony.

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From the Boo Hoo Department: Sony's Dave Karraker whines about PS3's treatment in the media

Via LazyGamer comes a link to this interview in GamePro with Sony's head of PR Dave Karraker:

GamePro: The Toughest Job in Video Games: Sony PR
I think a lot of this goes back to the proliferation of the Internet, where a very vocal minority can make a lot of noise and potentially alter perceptions of the masses, whether they are accurate or not. A lot of this, naturally, is driven by the media who seem focused on taking swipes at us lately, without taking in the full picture.

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A lot of the perceptions are not justified and seem fueled by people who don't have all the facts or have some kind of axe to grind.

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Sure, there were some perceptions on PS3 that were justified. For example, we didn't have nearly enough hardware at launch to meet consumer demand. That was difficult for all of us and contributed to a tough climate with press and analysts. That's behind us now, but a bit of that still lingers. Frankly, I have stopped talking to media about the launch and am now really just focused on the games.

So, it's unacceptable when a "vocal minority" alters the perceptions of the masses? Isn't that what advertising is about? So what Dave is saying here is that Sony's PR machine got out-maneuvered by people with no marketing budget.

The media is to blame, of course. They always are.

Translation: "Wah! It's not fair!"

It's only May, but I think that we might have a lock on the winner of Worst Publicist of 2007.

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Major game titles delayed, bad news for Sony, slightly bad for Microsoft

Tying in nicely to the concerns I raised earlier about Sony potentially not meeting hardward forecasts and how the downward spiral may be accelerated by game developers not jumping to the pump is this news item about delays affecting the two most awaited PS3 and XOBX360 titles.

Yahoo!: Summer will be 'painfully slow' for gamers

Blockbuster summer films are hitting the big screen, but the two most anticipated video games, Grand Theft Auto IV and Halo 3, aren't due until fall, and many other top-tier titles won't arrive before the holiday shopping season.

I imagine that hardcore gamers who haven't already bought a PS3 still won't feel compelled to run out and get one until they can also buy GTA4.

*UPDATED* edited because one of my astute, hardcore gamer readers pointed out to me that Halo3 will be exclusive to the XBOX360. Ooops!

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Sony promises to make some more Playstation 3 in time for Christmas

Yahoo!: Sony plans to ship 11 million PS3s this year

TOKYO (AFP) - Sony Corp (NYSE:SNE - news). said Wednesday that it aims to ship 11 million PlayStation 3s worldwide this year, ramping up competition against its rivals after missing its recent targets.
Sony shipped 5.5 million PS3 consoles in the year to March, below its target for six million due to production problems with its high-definition DVD player that gave rivals Nintendo and Microsoft an early lead in the console war.
Sony said it expects losses in its game division to narrow this year after swallowing the huge start-up costs of the console.
"Although it seems to be difficult to fully turn around the performance at the game division in the current fiscal year, increased sales of the PS3 should help narrow losses here notably," chief financial officer Nobuyuki Oneda said.

That's good news, but as Dr Phil would say to them, "Don't tell us. Show us!" Sony's Playstation division has not been good at keeping their promises so far in the last year, so if they can unkink their production problems, the proof will be in the pudding.

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Wii keeps on trucking, PS3 continues to dissapoint

I know that this counts as dogpiling at this point, but making fun of Playstation3 is like eating potato chips, it's hard to stop once you start.

Regardless, things aren't looking good according to the analysts:

GameDaily BIZ: Pachter Estimates Just 100K PS3s Sold in April

In February Sony sold 136,000 PS3s in the U.S. In March that total dropped to 130,000. So what does April hold for Sony's new console? According to Wedbush Morgan Securities analyst Michael Pachter, the PS3 may have had its worst month yet.
In his latest NPD video game sales preview (data is expected by the end of the week), Pachter estimated that the Wii sold 300,000 units in April compared to just 100,000 for the PS3. He believes the 360 sold somewhere in between, around 175K. The Nintendo DS is expected to dominate once again with 450K units sold. Meanwhile, the PS2 may have outsold both the PS3 and 360 with 250K. He thinks PSP sold 200K.

Sony has been talking tough, claiming that they may have lost the battle, but still haven't conceded the war:

LA Times: In consoles, the game isn't going Sony's way

Sony executives stress that the game is just starting. They say the PS3's technology is so advanced that it won't be considered obsolete for another decade, giving them plenty of time to catch up in sales."We didn't get into PS3 for the first six months of 2007 — we're into this for the next 10 years and beyond," said Jack Tretton, president of Sony's U.S. PlayStation unit. "A million units one way or another at this point isn't going to worry us."But so far, Sony is in last place.

But their bravado entirely begs the point that if console sales fail to gain critical mass, the incentive for software firms to engineer titles for PS3 will not be there, and the lag in unit sales could turn into a death spiral. If that happens, PS3 may end up as a case study in a product that was great (or at least sort-of-great) but still didn't succeed.

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Update on the Sony Goat Debacle

Both myself and Flatland Pastor had some strong words about Sony's goat-based marketing yesterday. But was it really such a bad idea from Sony's perspective?

Globe and Mail: Sony 'slaughters' goat. Apologizes all the way to the bank.

Sure, this is "bad PR" but it got God of War on the front page of one of Britain's biggest newspapers and it's all over the Internet today.
Yes, many people will think badly of Sony for a day or two. But few in the target audience (males in their teens and 20s) will be offended, and all this controversy will only sell more video games.

The only thing worse than being talked about is not being talked about. It seems that companies are succumbing to the lowest denominator attention-whoring that characterizes individuals who are willing to do anything be on reality TV.

In a sense I suppose that apologies are the corporate version of celebrity rehab. If the spotlight strays from you for even one second, do something insane, and then issue a tearful apology, and promise to seek help for your problem.

On the bright side, at least this stunt was thematically related to the game they were promoting. It's not as if a Sony Playstation exec was arrested for impaired driving, or shaved their head, or got busted for shoplifting in an EB Games.

This time.

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Sony's Latest Breakthroughs: Defying Gravity, and Pushing the Marketing Envelope

Despite a year and a bit that resemble nothing more than a Keystone Cops caper, Sony continues to do well, despite itself.

NYT: One Crisis After Another, but Sony Shares Keep Surging
A LOT of the news about the Sony Corporation over the last year has been — as its Welsh-born chairman, Howard Stringer, might say — rather dreary.

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Given all these challenges, it is not hard to conjure the image of Mr. Stringer as a stranger in a strange land, struggling to bridge an impossible cultural and operational gulf at his Japanese-based behemoth.
Despite all this, Sony is, curiously, the land of the rising stock. If you look at the share performance of some of the biggest media companies over the last two years, — roughly since Mr. Stringer was named as the first non-Japanese head of Sony — you might be surprised to see Sony near the head of the pack.

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But there is evidence to suggest that the new course the company has pursued — not to mention a healthy dollop of luck and timing — has yielded promising results.
There are, as near as I can tell, at least three main reasons for this. One is that Sony has gone a long way toward mending its electronics business, which accounts for roughly two-thirds of an expected $70 billion in sales in the year ended in March 2007. The second is that the company’s sprawling east-west software-hardware agglomeration may at last be starting to make sense. And, finally, there is Sony’s simple recognition of how deep a hole it got itself into — and how far it still needs to climb back.

Despite the good natured poking I give Sony on an almost daily basis, I do want them to win. Maybe it's because I hold them to a high standard, and when they prove to be a continuing disappointment, I'm fairly hard on them.

Regardless, Sony frequently exhibits self-destructive behavior. Note this animal rights scandal that has (mostly british) people aghast:

Daily Mail: Slaughter: Horror at Sony's depraved promotion stunt with decapitated goat

Electronics giant Sony has sparked a major row over animal cruelty and the ethics of the computer industry by using a freshly slaughtered goat to promote a violent video game.
The corpse of the decapitated animal was the centrepiece of a party to celebrate the launch of the God Of War II game for the company’s PlayStation 2 console.

Something that thoughtless has to be deliberate self-sabotage.

I can almost imagine the meeting.

Howard Stringer: "Right. Despite everything we've done wrong in the last 18 months, or stock is still up, our market share in video is still great, and our brand is still widely respected by customers. We need a really BIG goatfuck to trump the exploding batteries and the malware in our music CDs."

Publicist: "Hmm, goatfuck... sir, I have an idea!"

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Kutaragi, Father Of Playstation Bids Sayonara

I totally called this last September, by the way.
LDPO: Dealbreaker.com Rakes Sony Over The Coals

I think that for a division head at Sony Corp to come right out say, essentially "We're screwed" is monumental. Don't be surprised to see Mr. Kutaragi fall on his sword, at least metaphorically, over the whole Playstation3 disaster.

And so Ken Kutaragi joins notable luminaries, such as myself, as ex-Sony.
C-Net: Sony says sayonara to father of PlayStation


The "PlayStation 3 has been a huge disappointment, No. 3 out of three in terms of console sales," said Rob Enderle, principal analyst at the Enderle Group. "It's been a huge embarrassment for the firm, and a huge hole that money has been pouring into."



Console sales in March Number of next-generation video game consoles sold in March in the U.S.
Nintendo Wii
259,000
Xbox 360
199,000
PlayStation 3
130,000
Source: NPD Group



Enderle said despite Kutaragi's massive success with previous iterations of the PlayStation, he probably couldn't survive the very public drubbing the PS3 has gotten in the market so far.
"When you go from superstar to walking disaster, there are few executives that can survive that," Enderle said. "You're only as good as your last financial report, and while he was given some leeway (with the PS3) there were obviously some huge mistakes."



On the bright side, Sony no longer expects senior execs to "atone" for bringing shame upon the brand.


Then again, given the generally rough year they've had, with batteries, PS3, and whatnot, maybe Sony could use some fresh faces and new ideas.

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So What's Going On With The Playstation3?

In keeping with my propensity for only reporting on biased, anti PS3 sources, here's a lengthy tirade by a gamer, for gamers about why he thinks the PS3 hasn't achieved any significant traction.

Something Awful: Reflections On A Failing Game Console *(be aware that Something Awful is a humor site with a fair amount of content that your employer might not appreciate you surfing at work)*

In March, 2007 the PS3 sold 130,000 units. To put that into perspective the Gameboy Advance sold 148,000 units. The PS3 is basically getting beat by a fucking Super Nintendo. It doesn't take a rocket scientist to figure this one out.
When posed with the decision of what game system to buy, most gamers went with the GBA because hey, the money they save not getting the PS3 can buy a lot of weed. That's what being a smart consumer is all about. You don't need Blu-Ray and Talladega Nights to have fun. Buy the cheaper system and let the drugs do the rest. Of course this doesn't mean the Xbox 360 is making any waves. Sony and Microsoft and both getting beat by what is basically a portable Nintendo 64 with a cheap touchscreen gimmick.

I think that the author is on to something here.

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PS3 launch in Europe not all smiles and chuckles

But you will have a chuckle reading this website that seeks to undermine the PS3 marketing machine. Biased source? Absolutely. Entertaining? Definetely!

UK Resistance: VICTORY IN EUROPE! A PHOTOGRAPHIC CELEBRATION OF PLAYSTATION3's DESTRUCTION IN THE PAL REGIONS

EDINBURGH! As in numerous historic battles, the Scots provided some of the strongest and bravest resistance of all. We knew they would not let us down as the critical hours passed.

"I was uptown tonight in Edinburgh so thought I'd have a laugh at the spotty/unemployed/games industry people who turned up for the Midnight launch at Gamestation, Game and HMV on Princes Street. I think the picture attached, taken at 00:01, sums it up nicely. HMV was also shockingly bad, with less than 10 people instore at midnight. I'm not a fanboy of any colour, but it's nice seeing a company get a kicking for taking the public for granted - The Tophatron."


Hilarious!

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The most cogent analysis of the PS3 so far

Hat tip to Marketing Matters







I'm going to have this song stuck in my head all day now.

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