PlayStation 3 Enters the Ring

Sony competes with Microsoft and Nintendo for your mindshare

There’s another way to describe people who ‘go camping in the urban jungle’—and the word is “homeless.” That’s why it may have been baffling to see hundreds of perfectly well-housed men and women lounging around on Manhattan’s sidewalks in sleeping bags or tents last week. The prize was a Sony PlayStation 3, and the city was waiting. Just ask Angel Paredes who, according to the New York Times, spent three nights outside the Sony Plaza in Manhattan to be the first in line at the store.

Sony has quite a lot at stake this round and this bout should be anything but friendly. Microsoft struck preemptively, launching the Xbox 360 in November of last year, at a price tag of about $200 cheaper than the PS3 for a premium system. Nintendo’s innovative new console, the Wii, sells for about $100 less than its competitors. This ultimate corporate cage-match has just been thrust wide open.

Here’s a tip: Bet on Sony to lay the smack-down.

In recent months, Sony’s next generation gaming machine has been both trashed more times than my roommate and hallowed as the coming incarnate messiah of entertainment. Whether or not you worship the PS3 or detest it, though, you probably won’t be able to play it anyway—at least not for several months. The most powerful and expensive gaming console on the planet is also the most difficult to score. On the first weekend of the Japanese launch, suppliers sold out of the nearly 90,000 allotted systems. The same occurred stateside with more than $200,000 worth of consoles sold—and therein lies the beauty of Sony’s strategy.

Friday, Nov. 17 wasn’t about selling a videogame system. Not to Sony, and certainly not to Chairman and CEO Sir Howard Stringer, charged with revitalizing the corporation. Friday was about mindshare—the term used in the corporate world to describe how consumers think about a product. Friday was about media coverage of the hundreds of thousands that are so enamored with Sony’s hardware that they are willing to camp out on the pavement or even take a bullet for the chance to own one. If you don’t believe me, just look to the four people in Kentucky who were actually shot in a drive-by BB gun assault while waiting in line outside their local Best Buy.

Sony didn’t need to sell consoles; it just needed to show the world that their price tag was irrelevant, that the machine was worth anything and everything. And true enough: the PlayStation 3 is currently selling on eBay at, in many cases, prices of over $1,000.

In this regard, the decision to charge a higher price than their competitors ought to be applauded from a business standpoint. In charging $500-$600, Sony has, at no detriment to sales, again captured the mindshare of the nation. A higher priced product is, in general, psychologically more desirable. The PS3 will steadily decline in price as sales drive production costs down, just like the PS2 before it. When the price does drop, it will seem more like a steal to consumers.

The launch of the PlayStation 3 was a show. It was all a delicately scripted process that Sony has been preparing for years. The knockout plan is working, and in the long term it might just deliver a victory. Look for Sony to grab the title belt as long as mindshare stays in its favor. And if you did snag a PS3 last week, please go home and shower.

James M. Wilsterman ’10, a Crimson editorial comper, lives in Wigglesworth Hall.