Sony’s strategic approach to new product development historically has been product innovation through technology. Sony’s brand name is associated with one of a kind electronics, and this was accomplished through rigorous protection of its rights on technology. The pros of this approach is being a pioneer in the market, no competitors at the initial stage and potentially creating an entirely new market. Sony enjoyed strong market share or market dominance when products launch were successful such as Walkman and Trinitron. The cons of this approach is to lose market to competitors with inferior technology by unwilling to share its technology and unwilling to adopt other technology.
PS3 has all the features for consumers to enjoy for long term. The firms that succeed in competitive markets have a clear understanding that they must first determine what consumers want. However the weakness of the PS3 is higher price than competitions. It costs $200 more than the Xbox 360. Even with the higher price, Sony lost about $300 on each console due to expensive manufacturing costs. On the other hand, PS3 lacks original games. PS3 launched with 15 titles, but most of these were already available in Xbox 360. In addition, Xbox and Nintendo Wii had higher game ranking titles than PS3.
The reasons of new product failure are poor matching between features and customer desire, over estimation of market size and incorrect positioning with price high or low. Inadequate distribution is another factor. Sony’s initial launch was delayed for a season with technological problems, and Sony could not deliver the number of consoles needed to retails to meet the market demand. Sony focused too much on producing consoles that can last for long-term. Due to delayed launch, Sony spent additional money to convince the customers to wait to buy a console after holiday season instead of buying from competitors.
In the PS3 operating system, diverse software programs are possible through internet. They add internet news in the world, cyber networking and home entertainment programs with simple download. Compared to the Sony’s marketing of PS3, Nintendo’s marketing of Wii was more simple. The development costs of Wii were about a third of PS3. Wii was inexpensive yet it had higher ranking game titles than PS3. PS3 focused more on providing its users with better graphic hardware, but Wii focused more on practical software. For example, Nintendo added to its product line by introducing Wii Fit, exercise and weight-loss system for busy mom to its Wii line of gaming consoles.
The success factor of product is matching product for market needs. Company should listen from customers what they want, and produce best products with strong leadership. The launch of a product cannot be successful when potential buyers do not have access at the right time. PS2 was successful because it offered reasonable price with newly developed games taking advantage of the console’s more advanced graphics and delivering enhanced content through a built-in DVD drive. PS3 is upgraded version of PS2 with Blu-ray. In order to increase sales of the PS3, it needs to offer more quality games with original content through software development. If it provides more diverse internet programs, it can be used as a multi-functioning electronic for home entertainment.
