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Sony repositioning PlayStation 3 as all-in-one entertainment device

August 26, 2009 | 10:00 am

Shot03 copy Nearly three years after the device launched and quickly fell behind its two major competitors, Sony is attempting to reposition its Playstation 3 video game console as an all-in-one entertainment device.

The Japanese electronics giant is launching a new advertising campaign for the crucial fall and holiday season that places less emphasis on its video game capabilities and more on its ability to play high-definition Blu-ray DVDs and to download movies from the Internet.

One of the ads, showed to The Times by Sony in advance of airing, touts the PS3 as "the greatest gaming, Blu-ray playing, movie downloading system around." Another features a teenager complaining that his grandmother is using the console to watch Blu-ray movies, preventing him from playing video games.

After years of charging more than its competitors, Sony last week cut the price of the PS3 to $299, putting it in line with Microsoft's Xbox 360, which has various models that cost $199 to $299, and the Nintendo Wii, which costs $249.

The device's high price and complex set of features have been cited by many in the industry as key reasons for its slow sales. According to NPD group, consumers in the U.S. have bought just over 8 million PS3s through the end of July, compared with more than 15 million Xbox 360s and over 20 million units of the Nintendo Wii.

That has been a source of particular frustration to Hollywood studios, which have been counting on the PS3 to boost sales of Blu-ray discs, which haven't grown fast enough to make up for an ongoing decline in DVD sales.

"We have been a game company for years and we would never walk away from that, but research confirmed there is a larger proposition under our nose," said Peter Dille, senior vice president of marketing for Sony Computer Entertainment America. "We wanted to reposition as a total entertainment solution. We felt like we can really own entertainment."

The Xbox 360 has a movie download store that's similar to the one on the PlayStation 3 and enables Netflix subscribers to stream movies from the Internet, a feature Sony doesn't have. The PS3 is the only one of the three major consoles, however, to play Blu-ray discs.

Dille said that although Sony will keep marketing the PS3 to avid gamers, with an emphasis on high-profile new titles such as October's Uncharted 2, the new ad campaign will target more "moms and families" than before. Although the Wii has been extremely popular with families, there may still be more potential buyers in that market than among the young men who play video games most.

"It's pretty clear looking at the numbers that the 360 has done a better job at capturing the core gamer audience," said Jesse Divnich, an analyst with Electronic Entertainment Design & Research.

Sony has spent much of the last few years trying to attract gamers, with mixed success, as highly touted titles such as LittleBigPlanet and Killzone 2 have failed to rack up big sales. 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.

Divnich agreed that Sony's chances of success with that message are much better now than before. He noted that although overall video game hardware sales are falling in the recession, some of the hottest-selling gadgets feature multiple digital capabilities.

"A year or two ago, the idea of an all-in-one media hub was kind of a foreign idea among the mass market," Divnich noted. "Today thanks to new technologies like the iPhone, we've warmed up to the idea of products that meet all our multimedia needs."

-- Ben Fritz

Photo: A moment from one of Sony's new PlayStation 3 advertisements. Credit: Sony Computer Entertainment America.

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