Sony: Great Brand, Crappy Strategy

Two rather conflicting bits of news for Sony today. On one hand, a survey revealed that the Sony brand is stronger than Nintendo’s, and much stronger than Microsoft’s. (Forrester Research, which conducted the survey, went on to claim that “Microsoft faces big consumer defection risk.” Ouch.)

On the other hand, rumors abound that Walmart will quit the UMD business. Universal Studios has already ceased UMD production. Losing Walmart is a bit like having your legs chopped off. I wonder: if UMDs had cost half as much, would consumers have stuck with the format? The price always seemed excessive… to me at least.

It’s strange to witness such a mismatch between technical achievement, great branding, and questionable strategy. Why is Sony obsessed with expensive proprietary formats that almost inevitably generate apathy (if not resentment)? Why did it take the company so long to realize that, shocker of shockers, an online service would be important in next-gen consoles? Why is Sony letting the Nintendo Revolution run away with the physical gaming market, when the Eye Toy has been around for years? Where is Sony’s next-gen response?

I know, I know. It’s easy to criticize from the bleachers. They’ve got smart people who’ve managed to win two console wars in a row. And maybe these missteps don’t matter, since brand strength may preserve Sony’s dominance in the console market. Then again, I’m guessing that Nintendo had A+ brand strength with consumers once… before the GameCube?

2 responses to “Sony: Great Brand, Crappy Strategy

  1. Sony’s obsession with proprietry formats is indeed odd. But maybe not that odd when you consider their history – Sony have been trying to create successful formats since the cassette tape. It appears they can’t let go of their past.

    I don’t agree with Sony’s lack of foresight regarding online services. The fact is, Microsoft got in very early; I don’t believe Sony have lost much ground. Consider that multiplayer for the majority of playstation players is still about sitting in the same room as 1-3 other people. Online communities continue to be hijacked by cheaters, a culture exeplified by Halo 2 online. For online play to really take off for mass consuers its this culture that has to be changed. The DS may be making a small contibution with its online service, but it will require a heavyweight like Sony or Microsoft to force the change.

    As for Nintendo running away with the physical market … do you not think this is a little pre-emptive?

    Does Sony really need to ‘respond’? Sony continues to innovate in the market; I see Sony as a generalist, capable of setting trends without being possessive about owning them. Be it portable music, open architecture software development or the EyeToy. There are numerous examples of this in the hardware they produce and the software they support as well as their business models from disribution through to production.

  2. > Microsoft got in very early; I don’t believe Sony have lost much ground.

    You might be right. Time will tell. My concern is that developers have not had opportunity to build PS3 online service support into their games. (And it takes a while to get this stuff right, on both sides.) Gives Xbox an advantage in the first generation of next-gen titles.

    > As for Nintendo running away with the physical market … do you not think this is a little pre-emptive?

    Yes. 🙂

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