Case Sony

Responding to the Wii? |

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What are the important lessons from the evolution of the videogame industry that should SONY keep in mind as it formulate a strategy? What are Sony’s strategic options for regaining industry leadership? |

Contents

I. What are the important lessons from the evolution of the videogame industry that should Sony keep in mind as it formulate a strategy? 2

1 Managing gamer network 2

1.1 Pricing strategies 2

1.2 Increasing game availability 3

2 Managing relationship with game developers 4

3 Keeping user networks 5

4 First mover advantage lessons 6

5 Identifying new market 8

II/ What are Sony’s strategic options for regaining industry leadership? 10

1 Strength and resources 10

2. Strategic focus 10

2.1 Maintaining leadership in traditional gamers segment 10

2.2 Targeting new casual segment 11

2.3. Preparing for threat of envelopment 12

2.4 Focus on product performance and innovation 12

Despite being the leader in the video game industry during the last two decades, Sony is facing fierce competition from different videogame console providers. In the past, managing the two-sided networks of videogame industry– players and game developers - usually involves a great deal of trial and error strategies. Yet as the markets have become more competitive than ever, understanding of strategic lessons from video game development history is critical for Sony to formulate future strategies.

I. What are the important lessons from the evolution of the videogame industry that should Sony keep in mind as it formulate a strategy? 

1 Managing gamer network

Console providers like Sony bring independent game developers and players together on the same platform by building console and monitoring interaction between users in the networks. Interaction between gamers and developers is complicated as cross-side network effect and same-side network effects both exist in videogame industry. To illustrate, when...