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What are the main reasons for Sony PlayStation's profitability?

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What are the main reasons for Sony PlayStation's profitability? In the year 1994, Sony launched its own video console called the PlayStation which is now one of the most well known and best selling gaming consoles in the whole world. The PlayStation has been even more successful since the product has been re-launched and innovated in 2000, called PlayStation 2. The secret behind the success of high profitability will be discussed in this coursework, primarily the main reasons have been Innovation, the Advertising Strategy applied and the rest of the marketing mix used by the Sony Corporation. One of the main reasons behind the PlayStation being a 'winner' for the Sony Corporation is Innovation. Innovation is the process of bringing a new idea to the marketplace. Sony's PlayStation revealed the CD-ROM gaming technology for the first time in the market instead of the cartridge-based technology which was used by its respective competitors, Nintendo 64 and Sega Saturn. ...read more.


However, when competitors had entered and established in the market, PlayStation started to lose its market share. This had been decreasing PlayStation's profitability as sales and profits were falling. Sony responded with a brilliant strategy. They carried out Process Innovation. Process Innovation is defined as the development of new ways of producing an existing product. Sony applied an extension strategy to the PlayStation. It modified most of the 4 P's so that they could re-launch the product with a new image. They redefined the whole design of the product making it much more compact, less weight and easy to carry. This new attractive design made the product more appealing than before. Moreover, they launched the product with a new name, instead of 'PlayStation', they took the product out as 'PSone'. The price of the product was set again in order to make the product competitive. Competition pricing was used by Sony in order to regain market share. ...read more.


Apart from all these things, Sony's PlayStation has had other innovative ideas which have increased profitability. The PlayStation 2 also has a DVD player incorporated with it. This means that now the consumers enjoy the added value of a DVD player and they do not need to have a separate one. Moreover, Sony was the first one to introduce more than four players gaming through the Multi Tap. This meant that now consumers could play with each other just using one console which helped to increase flexibility. Furthermore, it also introduced the Memory Card which allowed users to save their game data in it. Like this, the user could continue the game from last saved stage or could take it to a somewhere else and play there. What is more that, PlayStation's remote control have more better design which make it easier to play and prove to be more comfortable. All these innovative ideas have helped to make the PlayStation much more appealing than the competitors' products. The profitability has again been affected due to these factors by incrementing it. ...read more.

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