THE CASE OF SONY’S BATTLE FOR VIDEO GAME SUPREMACY: Dilemma faced by the protagonist (CEO of Sony : Sir Howard Stringer) as to how they can launch the next generation of PlayStation PS3, which matches the success of PS2.

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Introduction: The case discusses the dilemma faced by the protagonist (CEO of Sony : Sir Howard Stringer) as to how they can launch the next generation of PlayStation PS3, which matches the success... of PS2. A simulator was used to predict the revenue, profit and market share of the company in the coming 10 years with the years varying in any range at each cycle. Simulator Parameters:  Console price per unit  Royalty percentage  Number of Games subsidized Initial Parameter Values of competitor:  Console price per unit : $ 274  Royalty percentage : ~ 60%  Number of Games subsidized : 1 Strategy: Stage 1. Acquiring the market: The initial approach to gain a profitable return in the long run was to first acquire a sizeable market than the competitor. Hence, the initial console price per unit was kept significantly lower for a couple of years. Initially, the number of games subsidized given in the console were more than the competitor in order to attract a larger audience. The royalty was also kept lower initially to attract publishers. After the second year of simulation, the market share that was acquired was 55% of the total share. Stage 2. Analysing the market: The competitor was highly adaptive to the changing strategies implemented. The number of games subsidized by the competitor was significantly close to the given number. The price of the console per unit given by the competitor showed a declining trend from the start. [Show More]

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