Untitled document

docx

School

University of Manitoba *

*We aren’t endorsed by this school

Course

2080

Subject

Business

Date

Apr 3, 2024

Type

docx

Pages

Uploaded by ProfessorSheepMaster1063

COMR-100 Individual Paper (IND) Assignment Student ID LAST 5 Digits: 48135 16 March 2024 Article Title: The Game Will Get Tougher for Sony's PlayStation 5 Article Publish Date: 15 February 2024 Article Link: https://www.proquest.com/abicomplete/newspapers/game-will-get-tougher-sonys- playstation-5/docview/2926367941/sem-2?accountid=14656 Word Count (Excluding References and Cover page): 1012 Words.

Summary and Analysis As we enter the halfway point of the second decade of the 21st century, the pace of technological advancement has reached unprecedented levels. These advancements in software and hardware have led to groundbreaking achievements in gaming technology. The Gaming industry is one that was created not too long ago, in the 1970s, however, in just 50 years of existing, this market has grown to become one of the biggest markets in the world. “The global video game industry is a billion-dollar business and has been for many years. In 2022, the revenue from the worldwide gaming market was estimated at almost 347 billion U.S. dollars” (Clement, Topic: Video game industry 2024) In the gaming industry, the gaming console market accounts for SD 57.20 billion in 2024, and is expected to reach USD 80.98 billion by 2029, ( Gaming console market - share, Size & Growth ) However, the large console industry is dominated by 3 major companies, those being Sony, Microsoft and Nintendo. The biggest of these 3 giants, Sony, stands out as the key focus of this Article. The console line published by Sony, known as the “Playstation” revolutionized the gaming console industry when it first came out in 1994. Since then, Sony has consistently released new iterations, with the newest of the consoles, Playstation 5 being released in November 2020. This was Sony’s most ambitious project yet, boasting advanced hardware and next-generation graphics chips. With cutting- edge performance, the PlayStation 5 was said to offer users with an unparalleled gaming experience, and it was destined for global success. However, unlike its predecessors, the PS5 did not do as well on launch. This was due to the ongoing pandemic and global lockdown, and the global chip shortage in 2021. “ Detailed within Sony's Q3 financial report for the current fiscal year, it was announced that the PS5 has now shipped 17.3 million units in total. This amount is retroactive to December 31, 2021, which means that we now know that the PS5 was able to sell around 15 million units in its first year on the market.” (Moore, Ps5 first year sales numbers revealed by Sony 2022). However, the numbers for Sony would soon change, as the Article states, the Playstation 5 had its best year of sales in 2023. In just three months of the last quarter of 2023, the console sold 8.2 million units. If we were to do a SWOT analysis on Sony's playstation 5, it has two clear strengths that give it an advantage over its competitor consoles. The first being the many exclusive games that Sony offers, which are games that can only be played on the Playstation 5, as these games are developed by Sony themselves. One of these games, is the game mentioned in the Article, “Marvel’s Spider Man 2” which sold nearly 10 million copies three months after its launch. The secret behind the game’s success, is the overwhelming dedication the game developers had, to provide us users with a good gaming experience. This ties back to a module we learned in the course, about Employee motivation. Sony hired game developers who found intrinsic motivation by developing games, because the developers were gamers themselves. This allowed the developers to do something they loved, and develop a game that they were very passionate about. The high pay, status and job security that sony provides to the developers may be considered as the extrinsic motivators. The other strength of Sony, is the subscription model that they offer, which can be said to be a part of their Customer Relationship segment in their Business Model Canvas. This subscription allows users of the console to gain access to numerous games for the period that they are subscribed for, games which would otherwise have to be bought individually. Sony has also made use of pricing strategies like what we have learned in the course, namely Bundling (By selling a PS5 along with a game

together for a discounted price) and Price Skimming. These paired with promotional discounts offered by Sony helped the Playstation 5 achieve a 22% increase in sales from the previous year. However, despite an increase in sales, the company still experienced a profit loss of 26%. This is because even though total units sold had increased, the profit per sale for a unit of Playstation 5 had decreased. Relating this to the financial ratios taught in class, In the 2022 fiscal year, Playstation 5 sales earned a net revenue of 26.9 Billion USD, from which Sony reported a 1.85 Billion USD Profits (Strickland, PlayStation delivers record $26.9 billion revenue, operating profit drops 40% 2023). This indicated a Return on Sales ratio of 0.068 for the 2022 Fiscal year. While the data for the 2023 Fiscal year is not yet published, the forecasted fall of the profit indicates a lower RoS ratio. It is also speculated that 2023 is the console’s best year, and sales are expected to fall in the upcoming years. Sony themselves are also expecting a decline in PS5 sales, since they are not going to be releasing any major games in the upcoming fiscal year. A major competitor to Sony, Nintendo is also expecting to release their brand new console very soon. Returning to the SWOT analysis, a major weakness for Sony’s playstation 5 is its lack of portability. This weakness for the Playstation 5 is a big Strength for the Nintendo console, which you can bring with you anywhere and play games on the go. The existing Nintendo console is already very popular, and a successor to this console will complicate the market severely for Sony and the Playstation 5. To combat this competition, Sony will need to make use of the opportunities it has with its console, by adding more game titles to its existing lineup of exclusive game titles, or by further enhancing its subscription model by adding more features to it. While the past year was great for Sony’s Playstation 5, a lot more needs to be done for the console to maintain its success.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

References Wong, J. (2024, Feb 15). The game will get tougher for sony's PlayStation 5. Wall Street Journal Retrieved from https://www.proquest.com/abicomplete/newspapers/game-will-get-tougher-sonys- playstation-5/docview/2926367941/sem-2?accountid=14656 Clement, J. (2024, January 10). Topic: Video game industry . Statista. https://www.statista.com/topics/868/video-games/#dossier-chapter4 Gaming console market - share, Size & Growth . Gaming Console Market - Share, Size & Growth. (n.d.). https://www.mordorintelligence.com/industry-reports/gaming-console-market Moore, L. (2022, February 2). Ps5 first year sales numbers revealed by Sony . Gaming. https://comicbook.com/gaming/news/ps5-playstation-first-year-sales-sony/#:~:text=Detailed%20within %20Sony%27s%20Q3%20financial%20report%20for%20the,units%20in%20its%20first%20year%20on %20the%20market Strickland, D. (2023, May 24). PlayStation delivers record $26.9 billion revenue, operating profit drops 40% . TweakTown. https://www.tweaktown.com/news/91280/playstation-delivers-record-26-9-billion- revenue-operating-profit-drops-40/index.html

Related Documents

Pfau, Suzanne-DB3-ACCT 612.docx

QMETH 201 Quiz 1 Madunic FALL 2022.docx

Fundementals Of Cost Accounting Seventh Edition-McGraw Hill- ACCT521 CH 15 QUESTIONS Week 7.docx

Fundementals Of Cost Accounting Seventh Edition-McGraw Hill- ACCT521 CH 17 QUESTIONS Week 8.docx

420 WORKSHEET.docx

17Question 3 of 3 - Ch 23: Homework with Video Assistance.pdf

MAG-CSD-Customer Service Training Toolkit_v0_0.docx

SITXCOM010 Assessment Task 2.docx

Week 2 External Environment and SWOT A.docx

HRM 200 Project One Speaker Notes.docx

BUS 206 Project Three Submission-Contract Law.docx

Assignment 4.docx

Recommended textbooks for you

BUSN 11 Introduction to Business Student Edition

Business

ISBN:9781337407137

Author:Kelly

Publisher:Cengage Learning

Essentials of Business Communication (MindTap Cou...

Business

ISBN:9781337386494

Author:Mary Ellen Guffey, Dana Loewy

Publisher:Cengage Learning

Accounting Information Systems (14th Edition)

Business

ISBN:9780134474021

Author:Marshall B. Romney, Paul J. Steinbart

Publisher:PEARSON

Introduction to Business

Business

ISBN:9781947172548

Author:OpenStax

Publisher:OpenStax College

International Business: Competing in the Global M...

Business

ISBN:9781259929441

Author:Charles W. L. Hill Dr, G. Tomas M. Hult

Publisher:McGraw-Hill Education

Bcom

Business

ISBN:9780357026595

Author:LEHMAN, Carol M.

Publisher:Cengage Learning,

SEE MORE TEXTBOOKS

Recommended textbooks for you

BUSN 11 Introduction to Business Student Edition
Business
ISBN:9781337407137
Author:Kelly
Publisher:Cengage Learning
Essentials of Business Communication (MindTap Cou...
Business
ISBN:9781337386494
Author:Mary Ellen Guffey, Dana Loewy
Publisher:Cengage Learning
Accounting Information Systems (14th Edition)
Business
ISBN:9780134474021
Author:Marshall B. Romney, Paul J. Steinbart
Publisher:PEARSON
Introduction to Business
Business
ISBN:9781947172548
Author:OpenStax
Publisher:OpenStax College
International Business: Competing in the Global M...
Business
ISBN:9781259929441
Author:Charles W. L. Hill Dr, G. Tomas M. Hult
Publisher:McGraw-Hill Education
Bcom
Business
ISBN:9780357026595
Author:LEHMAN, Carol M.
Publisher:Cengage Learning,