Strategic Analysis of

the Sony PlayStation

Console
GABRIEL RAMIREZ, LEAD STRATEGIST
Overview of the Product

 The first Sony PlayStation launched at the beginning of the fifth generation of
consoles (1993-2006), with it releasing first in Japan in December of 1994, and
then the US in September of 1995.
 The original Sony PlayStation was the first CD-Based gaming console to achieve
commercial success.
 It was capable of displaying 3-D polygon graphics, something not yet common in
the gaming industry.
 A breadth of games that are still popular and releasing sequels to this day were
created for the console, including Final Fantasy and Tomb Raider.
Pre-Launch Environment

 Prior to the release of the PlayStation, there were already key technological
players controlling the market. Big names like Nintendo and Sega had a long line
of established consoles.
 The Super Nintendo Entertainment System (SNES) was launched in 1990 in
Japan and 1991 in the U.S. This console was cartridge based as opposed to CD,
with 16 bits of memory. Nintendo outsold competitors nearly 2 to 1 and held a
60% market share of the console industry in 1991. It was sold for $199 USD.
Everyone knows the SNES for the popular Mario Franchise.
 The Sega Genesis released in 1988 in Japan and 1989 in the U.S, putting them
chronologically ahead of the newer consoles and allowing them to grab a hold on
consumers early on. It was also a 16 bit console and cartridge based. Sega took
up about 20% of the console market share in 1991, with a selling price of $200.
Games like Sonic the Hedgehog gained a name on this console.
Pre-Launch Environment (continued)

 As previously mentioned, both the Sega Genesis and the SNES operated on 16 bit
technology. Both consoles were capable of 3-d graphics, however it was very
primitive and low quality.
 The SNES was marketed towards a variety of groups, from kids to teenagers to
adults. The Sega Genesis was targeted more specifically towards an older
audience.
 The SNES had more RAM and could process more instructions per second
despite having a slower CPU. As far as basic technology goes, the SNES was
regarded as being more capable than the Genesis, and sales numbers reflected
that. The SNES sold 49 million consoles worldwide, compared to 30 million for
the Sega Genesis.
4 Actions Framework
Reduce
• Size, to be sleeker and more
modern
• Cost to be $100 less than the Sega
Saturn that released at the same
time
• Packaging size for games, making
them easier to store and collect
Create
• Developer consoles, to allow owners
to make their own games
• A plethora of console exclusive
games
• Ports to add memory cards
• Ability to play with up to 8 controllers
at once
Eliminate
• Cartridges in favor of CD’s
• Nintendo partnership on a CD based
console, Sony became sole owner
• Unnecessary cable ports
Raise
• Quality of 3-D Visuals using polygon
graphics
• Data limit from 4 MB (SNES and
Genesis) of storage to 700 MB.
• Number of inputs on the controller
• Audio quality, with Dolby Surround
Sound.
 Strategy Canvas (Before)

“High”

SNES
“Med” Genesis

“Low”

Number of Quality of Controller Audio and Design Cost

Games Games Capability Graphical Appeal
Available Quality
 Strategy Canvas (After)

“High”

PlayStation
GAP SNES
“Med” Genesis

“Low”

Number of Quality of Controller Audio and Design Cost

Games Games Capability Graphical Appeal
Available Quality
6 paths

 Sony chose to go with the 6th path, namely “Looking Across Time”
 Sony was able to break from following industry trends and set the standard for
future product releases that are still in effect to this day.
 Up until the release of the PlayStation, consoles loaded games using Cartridges,
capable of storing only about 4 mb of data.
 PlayStation introduced the first CD gaming console, capable of storing 700 mb of
data.
6 paths (continued)
Effect of CD gaming
 The introduction of the CD gaming trend by Sony ushered in a new world of
possibilities for game developers and gamers alike.
 Games like Gran Turismo, Resident Evil, Metal Gear Solid, and more, were able
to utilize the increased data limit and maximize its potential
 Games now included full soundtracks, longer stories, cinematic cutscenes, and
improved graphics. Consumers got more “game” for their money.
 Sony further evolved Controllers to have 14 inputs. To this day controllers still
look much the same as they did for the original PlayStation.
Risks of the “Looking Across Time”
Strategy
 Attempting to create a blue ocean has inherent risks involved with making a
drastic change in a product or service.
 Sony’s main risk with making the change to CD was that people may not care to
switch to the new style of games. Nintendo had classics like Mario that had been
keeping entertained to this day, and so they may have been content to stay on their
Nintendo.
 Because CD games were a brand-new concept, proper security measures to
prevent pirating/ copying of the game were not fully implemented, so people
could more easily acquire the games illegally.
Risks of the “Looking Across Time”
Strategy(continued)
 CD games were more easily damaged than a cartridge, which could turn people
away as they risk losing the ability to play some of their games if they get too
scratched up.
 The new state of the art technology comes with a higher price point, which might
price out consumers who recently bought the SNS or Genesis.
 The new controller had more inputs; however, this increases the skill required to
play a video game on the PlayStation and makes the SNES and Genesis more
friendly to casual gamers.
Post-Launch Success

 The first PlayStation Console was a resounding success worldwide, it became the
first console to sell 100 million units.
 The success of the first PlayStation spawned numerous new iterations of the
console, with the PlayStation 5 (released in 2020) still being at the top of the
gaming food chain. What was once a battle between SNES and PlayStation is now
Xbox Vs PlayStation.
 At launch PlayStation sold 4.3 million units. That same year the SNES sold 2.65
million.
 The sales for the console did not skyrocket straight from the get-go. It took about
3 years for PlayStation sales to hit their peak, selling 21.6 million units in 1998
compared to 50 thousand for the SNES.
Post-Launch Success