Adaptation = Survival: How an electronic video game manufacturer becomes a digital service provider

Like in Darwin’s Species’ Natural Selection, adaptation is survival.  

We are so lucky to be alive to witness one of the most challenging eras of human kind in regards to technology innovations. Our completely lifestyle has been modified thanks to the development of devices and infrastructure that only a few years ago didn’t exist.

To keep up with this, both persons and corporations must honour Darwin’s discovery and adapt to the changes, step up to the challenges or die as fast as a match burns. A great example of this is the globally recognized brand PlayStation.

Default1As part of the electronic video games industry, PlayStation has been facing the challenge on recent years of offering more than just consoles and software. The market place today demands connectivity and communication in real time (Aleem, Capretz & Ahmed 2015). Welcome to the digital era!

playstation_light_keys_words_22100_2560x1440

So let’s skip to the main line, the news by excellence: in past April 1st, 2016, Sony Computer Entertainment changed its name to Sony Interactive Entertainment.

Do we really need to explain further?

Beginning with the PS Share button

PS4-Share-button

In 2013, PlayStation launched a new console generation leaving PlayStation 3 behind to deliver PlayStation 4. One of the main improvements was this new button implemented in the controller (DualShock 4) named “Share” which allows players to, as the name itself indicates, share their gaming experience with just one tap, connecting immediately to their friends as they livestream their gameplay. This button can be used as well for sharing videos or screenshots of the game to the user’s friends and they can save and upload their favourite moments of the game.

This is just a small example of how PS business is focusing on the new trends of the market place. This blog is not long enough to suffice the many implications that lead the company to change their focus to Interactive Entertainment. Just to write about the new VR (Virtual Reality) headset we could come up with an entire book!  According to a recent article in Fortune, the market potential for the launch of SIE’s VR is of at least 36 million buyers (O’Brien 2016).

So what are they doing exactly? Considering Ansoff’s business growth Matrix for product-market strategies, where would PS fit in? I bet you know the answer already, but unfortunately I need to include the analysis paragraph still, so here it goes:

Comparing PlayStation to Ansoff’s product-market strategy

  1. Market penetration: As opposed to this strategy, PS is aiming to give their current customers exactly what they desire by offering an improved and broader product line-up.
  1. Market development: SIE already is an international company, well established in regard to distribution so I don’t believe this is what they are focusing on with this specific case.
  1. Product development: Ring any bells? If we consider the way the PS console evolved from gaming-focused to connectivity-gaming-focused and how the latter converts the product into a broader good + service offer, then it seems to me like the company opted for this pathway.
  1. Diversification:  If we focus on the new products such as Project Morpheus (PS VR Headset) they definitely are to be categorized in this strategy, hence the changing of their name.

Before we jump to any final conclusions let’s read the following quote:

‘[…] It must be emphasized that in most actual situations a business would follow several of these paths at the same time’ (Anssof 1957)

20160316-Playstation-VR-980

Therefore, drumrolls, please… SIE fits in not just one strategy both two! Depending on which product we choose given their broad line-up from consoles and accessories to software and online gaming platforms, including PSN and PS Store, even gear for the greatest fans! However, using the examples mentioned in previous paragraphs we can categorize the Share button as Product Development and the VR headset as Diversificationpsn-logo. And if we want to summarize the overall company’s strategy we definitely have to categorize it as Diversification, which completely makes sense to changing their legal name from Computer to Interactive.

Customer satisfaction must be an integral part of the organization and is a financial metric that can be used to measure business performance‘ (Aleem, Capretz & Ahmed 2015). Having mentioned this, Seems like this brand knows how to implement an excellent marketing strategy, converting a threat into an opportunity and engaging with their users wants and needs while adopting the technology worldwide trends and renewing their product’s lifecycles.

Let’s wrap it up with this fantastic phrase they used in the 2013 presentation video for the PS4 platform at PlayStation Meeting 2013:

We didn’t build a box, we built the most amazing place to play” Hats off if you get it.

 

Georgina Pina Sevilla

ID 215469728


 

Aleem, S, Capretz, L, Ahmed, F 2015, ‘Empirical investigation of key business factors for digital game performance’, Entertainment Computing, vol. 13, doi:10.1016/j.entcom.2015.09.001

http://ezproxy.deakin.edu.au/login?url=http://www.sciencedirect.com/science/article/pii/S1875952115000130

 

Ansoff, H 1957, ‘Strategies for Diversification, Harvard Business Review, vol. 35, no. 5

http://ezproxy.deakin.edu.au/login?url=http://eds.b.ebscohost.com/eds/detail/detail?sid=dcb9cc2e-2107-467a-b665-a96387560832%40sessionmgr102&vid=0&hid=121&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d#AN=6769323&db=bth

 

Iacobucci, D 2013, MM4, Cengage Learning, Mason, Ohio

 

O’Brien, J 2016, ‘The race to make virtual reality an actual (business) reality’, Fortune, vol. 173, no. 6

http://ezproxy.deakin.edu.au/login?url=http://eds.b.ebscohost.com/eds/detail/detail?sid=01494ff3-5bfd-4794-adf0-838ccd852b8a%40sessionmgr105&vid=0&hid=121&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d#AN=114741705&db=heh

 

Official Press Release link: <http://www.sie.com/en/corporate/info/160401.html >

 

Playstation 4/PS4 Games Montage “We Didn’t Build a Box” (Playstation Meeting 2013) 2013, YouTube, ZybakTV, 21 February, retrieved 24 July 2016, <https://www.youtube.com/watch?v=CXFPggWCQAc>

 

Tretton, J 2013, ‘The future of gaming is here with PlayStation 4’, PlayStation.blog, blog post, 21 February, retrieved 24 July 2016, <https://blog.eu.playstation.com/2013/02/21/playstation-meeting-2013-the-future-of-gaming-is-here-with-playstation-4/>

 

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