1

PESTLE Risk analysis PlayStation

Alonso Jesus De las Casas Zolezzi

San Ignacio University

Course number: MA50400

Instructor: PhD Silvio Tracanelli

Due Date: 02/04/2024

 2

PESTLE Risk analysis PlayStation

PlayStation, one of the leading gaming companies in the world, although it is at the

forefront of the industry, has suffered different events related to the types of risks that a company

of its characteristics can face.

That’s the case in which data breach exposed personal and password information of millions of

users because of a cyber-attack occurred on 2011, this situation could potentially lead to identity

theft and other malicious activities, (Messmer, 2011).

Because of this, it is crucial for all companies to consider all their environment’s risks associated

to be able to cover their backs and mitigate the consequences in cases like the one mentioned

above.

 Political: The stability that PlayStation seeks in most of its potential markets reduces

political barriers in the global environment, opening opportunities for business expansion.

Additionally, Sony is poised to benefit from increased government support for data

security (MBA Skool, n.d.).

- Short term risk: Sudden imposition of trade tariffs by a government, that can affect

local transactions for example Argentina with e shops from several companies.

- Long term risk: Emergence of a new government that implements policies that are

unfavorable to foreign investors or businesses through restrictive regulations.

 Economic: The increased competition from other gaming companies such as Microsoft

and Nintendo, which could lead to a decrease in market share and revenue (MBA Skool,

n.d.).

- Short term risk: Increase in the supply chain costs for the distribution of consoles due

to a specific issue such as the Panama Canal drought.

 3

- Long term risk: The disruption of new competitors in future generations, as well as

new technologies developed by ongoing competitors.

 Social: It's interesting to see that younger gamers are recognizing the potential of mobile

games and are seeking more immersive and engaging gaming experiences; working from

this point, PlayStation has been reinforcing their development studios to assure this

market for them (MBA Skool, n.d.).

- Short term risk: Controversy after the launch of a controversial game that can harm

the brand image, for example The Last of Us 2’s controversial ideas.

- Long term risk: Brand image harm because of campaigns of excessive gaming can

lead to social isolation and a decline in physical activity, which can have negative

impacts on both mental and physical health, even if this is not responsibility of

gaming brands.

 Technological: The development of new consoles and video games is directly related to

external gadgets which could reproduce all these characteristics. Technology developers

can become important partners (MBA Skool, n.d.).

- Short term risk: Software updates launched with possible connectivity issues.

- Long term risk: The console becomes obsolete before expected as new technology

and gaming platforms emerge from competitors.

 Legal: The responsibility of PlayStation regarding user’s information and warranty of the

products offered (MBA Skool, n.d.).

- Short term risk: The use of hacked or modified consoles or videogames, that has to be

patched in future software updates, so the sales are not harmed.

 4

- Long term risk: Safety and security of personal data, as well as potential legal

challenges related to ownership and control of virtual goods and currencies.

 Environmental: As every company, PlayStation has environmental responsibility and

standards to be met to avoid increased carbon emissions and other negative

environmental impacts (MBA Skool, n.d.).

- Short term risk: The correct or not use of energy use by their users makes them part

of the environmental impact.

- Long term risk: The electronic waste generated during production may significantly

exceed the maximum permitted.

Conclusion

PlayStation has managed to build a strong brand image and a loyal customer base, which is great.

However, it should also be noted that the market it operates in is highly competitive and there are

several challenges that it needs to tackle. These challenges include increasing regulations,

economic uncertainties, and changing consumer preferences.

 5

References

MBA Skool (n.d.) Playstation PESTLE Analysis.

https://www.mbaskool.com/pestle-analysis/companies/18079-playstation.html

Messmer, E. (2011). The Sony PlayStation Network breach: An identity-theft bonanza: Massive

Sony PlayStation data breach puts about 77 million people at higher risk of

fraud. Network World (Online), https://www.proquest.com/trade-journals/sony-

playstation-network-breach-identity-theft/docview/864209183/se-2