The Interactive Video Gaming industry is highly competitive with three dominant players Sony, Microsoft and Nintendo. Price in the Marketing mix of Sony Playstation Sony has kept a premium pricing policy with respect to its high technology background and equally breath taking features. Taiwan-based TSMC etches the SOCs for AMD, Sony, and Microsoft onto giant wafers. In 2011 and 2012, Microsoft looked at its data and saw that people used Xbox 360 to watch video and play games online. That means failures for finished products, but it also means low yields for those SOCs. For its part, a Sony spokesperson commented to GamesBeat on the Bloomberg story: While we do not release details related to manufacturing, the information provided by Bloomberg is false. Such events help Sony feature and advertise their products to the larger crowd and focus their products to the prospective buyers, i.e. Register today to connect with the games industry, join private networking sessions, and hear the latest on driving game growth and the metaverse. Microsoft announced the price of the Xbox Series X as $499.99. In a recent company strategy briefing, Sony chief executive Kenichiro Yoshida described the PlayStation 5 (or whatever it is eventually called) as a niche product aimed at hardcore players. Sony market based pricing is based on price skimming, this is the most commonly seen with … Gaming consoles are known for their packaged deals. The demand is how much consumers want a thing, and the supply is how much access they have to that thing. And the BOM is a crucial part of the arithmetic that companies do when they pick a price. This is in part because we associate a series of zeros with large numbers. Thus, external factors like customer perceptions force the value pricing strategy. PS5 v Xbox Series X PRICE WAR: Microsoft to use Sony's PS4 strategy against them MICROSOFT could borrow Sony's PlayStation 4 pricing strategy for next-gen console war between Xbox Series X and PS5. The full version and the discless digital model have all the same specs. The Sony PlayStation 4 is just one example of a product which was highly anticipated by millions of people of which several did not purchase due to the price tag. It has been reviewed & published by the MBA Skool Team. So does Sony charge $50 less? Cost-plus pricing—simply calculating your costs and adding a mark-up; Competitive pricing—setting a price based on what the competition charges A lot of factors will play into that choice. Video storage capabilities of 500GB or 1TB. Alongwith their prices they provide superior quality and advanced features unlike competitors. If it goes with $450 and $500, it wants to compete with Microsoft while maintaining a higher price. By using the concept of differential pricing strategy, PlayStation is able to maximize its profits by making customers pay for its products as per their spending capabilities. Even cost of production doesn’t reflect everything console companies spend money on, though. After reading my classmate’s blog on this topic , I realized that as a result of the price skimming tecnique the PlayStation 4 has done extremely well in terms of sale in comparison to its rival- Xbox One. If Sony is worried about Microsoft’s pricing, getting a “3” at the start of the price with PS5: Digital Edition at $399.99 makes the most sense. It is a subsidiary of Sony Interactive Entertainment one of the largest video games company in the world. If you have a product that customers will continually renew or update, you’ll want to consider a captive pricing strategy. Another major factor in deciding the price is how to position the two versions of the PS5 against one another. At a certain point, a console manufacturer understands all of its costs. Television advertisements is also widely used for the promotion of PlayStation. Ultimately, what seems to be a convenient option for the consumer is really a strategy to increase profits gained from the Sony Playstation Move. It was originally launched in the year 1988 jointly by Nintendo and Sony. Sony applies the following pricing strategies: Premium pricing strategy Market-oriented pricing Value-based pricing And while gaming is a massive business, it’s also surprisingly tight-knit and insular. In that case, expect a $100 difference between the two PS5 variations. PlayStation 4 Pro boasts of having graphics of 4K level; which is not provided by any other consoles. The promotional and advertising strategy in the PlayStation marketing strategy is as follows: PlayStation from Sony spends a huge sum of revenues for promotional activities for its brand PlayStation. The retail electronics shops also give place to Sony products specially the PlayStations. 18 Responses to Sony PlayStation 4 price slash strategy tipped amid console competition. Captive pricing. It’s also about access to select, exclusive games and the quality of multiplatform games. Also the price of games varies from time to time. New York (CNN Business) After several teasers and mini-events, Sony has finally revealed the price of its much-anticipated PlayStation 5. If the PS5 is losing money at $500, which is possible, then the PS5: Digital Edition would lose even more at $400. This is something that the PlayStation and Xbox brands can take advantage of by appealing to loyal followers. Sony is going to have to eat the cost of the unused SOCs. In addition, PlayStation offers a large variety of bundles to choose from based on the consumer’s preference. Weaknesses in The SWOT analysis of Sony PlayStation. Let’s just enjoy saving some cash and let Sony worry about that. It then has to decide what to charge its customers. They’re trying to build a community. It also helps gamers manage multiplayer settings. Putting a “4” at the front of the number is huge. Prices are updated daily based upon Playstation 2 listings that sold on eBay and our marketplace. MBA Skool is a Knowledge Resource for Management Students & Professionals. Probably not. PlayStation 3 provides HD and 3D graphics and its made as a family entertainment console type. Large retail chains like Reliance, Chroma and Home shop provides shelf space to PlayStations. The bill of materials (BOM) is how much it costs a company to acquire all of the components to build their product. The companies are not associated with MBA Skool in any way. Sony also used this strategy for previous consoles, the Playstation 2 retailed for $299 at launch; Sony later cut the price to $199 and finally $99 today. And if goes with anything over $500, it’s only because it is less worried about Microsoft than it is about its own profits for the next several quarters. PlayStation uses aggressive promotion as a part of its marketing mix. So Sony isn’t going to price the PS5 at $1,000 just because it could probably sell a lot at that price in the first month. PlayStation can also be purchased from online ecommerce platforms. 3 a) The pricing strategy of PlayStation is pretty much like the pricing tactics of their rivals. Stunning graphics and powerful battery backup makes PS Vita as a highly-coveted product for gamers who are always on the move. This is going to make the Digital Edition feel like a bum deal (regardless of its actual value). But how does a company like that pick a price for something like a PS5? So when it designed the Xbox One, it did so with a focus on TV and online functionality. People identify as gamers in a way that people don’t identify as readers, for example. bibleverse1 says: Feb 18, 2013 at 9:35am. In that case, Sony could deploy the decoy effect. The Marketing Mix section covers 4Ps and 7Ps of more than 800 brands in 2 categories. Marketing Mix of PlayStation analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the PlayStation marketing strategy. This article elaborates the product, pricing, advertising & distribution strategies used by PlayStation. Sony TV’s pricing strategy follows market-skimming, product line pricing and product bundle pricing. Creating a game-playing box comes as a result of years of research and development, which is expensive. Owing to this pricing strategy they have managed to earn huge profits that are generated through its remarkable sales. In collaboration with the best ecommerce platforms, PlayStation products are sold in amazon.com, ebay.com, flipkart.com and shopclues.com. If Sony would prefer customers spend more money upfront on the standard PS5, it could create a decoy effect with a $449.99 price for PlayStation 5: Digital Edition. PlayStation 5’s price will say a lot about Sony’s strategy Whatever Sony decides, it should tell us a lot about its overall strategy. Bundled together, Sony’s product would sell for roughly $120, the Motion controller at $50, the Playstation Eye at $40, and the Navigation controller at $30, compared to Microsoft’s Kinect which sold for $150 originally. Sales & Marketing case solution based on HBR framework Microsoft follows a competitive based strategy for this video gaming console brand Xbox in its marketing mix pricing strategy. It’s even more important for the Xbox Series S, which leads with a “2” for its $299.99. Reply. PlayStation Vita is a smaller version of the consoles. but we can’t say the same for PS3. And while those might seem intrinsically linked, the cost only really acts as one variable in an equation that primarily involves supply and demand. In 2009, Sony issued another price cut and eliminated the 40gb and 80gb models, replacing it with 120gb and 250gb models. Demand for those experiences is high, but the supply is limited because you cannot just get God of War anywhere. Let us start the PlayStation Marketing Mix & Strategy: The product strategy and mix in PlayStation marketing strategy can be explained as follows: PlayStation primarily manufactures home consoles for Video games. The difference is that cost of manufacturing would include things like assembly and quality-assurance processes while cost of production would include everything involved with creating a product to be shipped. The PlayStation 4 costs approximately ₹32000. 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