Sony's European PS3 Success

Posted: 03-29-2007, 07:23 PM

Everyone spelled doom and gloom for the PS3 on the eve of its European launch, but after very good sales news from the UK, it would seem Sony might have the last laugh.

If I were Sony right now, I’d be rather relieved. Whilst they perhaps overstocked Europe for the launch of the PS3 and then proceeded to irritate people with bizarre advertising campaigns and backwards compatibility issues, the system has sold impressively. Add in a bit of arrogance, a high price point and a whole lot of bitching from Microsoft and Nintendo and you had a console launch that wasn’t exactly glowing with positives. Sony threw some very expensive Bravia TVs at the problem in London, which was very good (but very costly) PR, but the telling factor was always going to be in the sales.

A lot of people compared the PS3 launch to that of the Wii. With stock still available left right and centre critics were saying that this showed how little people cared about the PS3. Thousands sat there on store shelves, unloved, lonely and unwanted. On eBay, auctions for the PS3 were closing at £350, meaning that the stupid people who buy things with the sole intent of flogging them for a profit hours later were left rubbing their grimy, scummy little pockets. What everyone seemingly failed to note is that the PS3 had a lot of stock and the Wii had very little. Throw in the price factor and you have a very different set of circumstances.

The good news then. The PS3 has become the fastest selling home console in the UK, shifting over 165,000 units in its first two days of release. Only the PSP has bettered this when it sold around 185,000 on its release a couple of years back. Further to that, Sony confirmed that around 600,000 units had sold across the whole of Europe. In terms of profit, Sony will be interested to see the hardware to software ratio, which was a fairly healthy 1.65. Rather predictably, Resistance Fall of Man went straight in at No.1 in the All Format Chart, Motorstorm drove in at No.2 whilst a further six PS3 titles got in the top ten, thirteen in the top forty, of which 5 are PS3 exclusive.

That, for Sony, makes very good reading. Not only has the PS3 sold well, but the software has sold well. If they can get some good press of the launch, then the PS3 units that are still in stock (of which there are quite a few), then Sony can sell through their reserve and then easily replenish stock. Whilst I still think they were very wrong to not go for a worldwide launch, they might still get away with it. Admittedly, Nintendo did just as well by launching the Wii all over the world with just a few weeks between regions. It is a bit of a tricky one to weigh up if we’re to work out the ‘winner’ of the first bout of the console war.

So let’s look at it like this. For the Wii, demand outstripped supply, for the PS3, supply outstripped demand. Bad planning on Nintendo’s part and good planning on Sony’s part? Not really. Nintendo took a risk that Sony weren’t willing to take, and I think it has paid off well for both companies. Nintendo released the Wii in time for the lucrative Christmas market which really helped to create a market position from which the Wii became the ‘must have’ Christmas gift. Conversely, by delaying the PS3 until March here in Europe, Sony have been able to have a clean punch at the market in 2007. By having no direct opposition to battle it out with, Sony have the hot new product on the market and people have shown enough interest to make it a good success for the company.

Sony have been at pains to point out the importance of Europe until then. Phil Harrison stated that it is the most important territory of all. Speaking just before the launch, he said: "The fact that we've got the launch here with more consoles shipped on day one that we've ever had in our history is a compliment to the importance of the European market." By dedicating so much stock to the region Sony have shown that they really care about the European market. Whilst there has been a lot of negative press surrounding the launch, at the end of the day Sony have approached the European market with a great deal of intelligence.

Yes, the price point is very high and yes the games are a bit iffy, but in terms of sales, stock and happy customers, Sony have really pulled a blinder. It might not have had the best games and it might have been a bit late for the party, but somehow, Sony have managed to pull it off. Some people will still say that the failure of the PS3 to sell through its launch stock (it sold over half across Europe), but it will be sales from this point that will be the telling factor. Carl Gressum, senior analyst at the technology consultancy Ovum, said the first buyers would be dedicated Sony fans: “Those consumers tend to be willing to pay a large premium to get the new PlayStation. That is a limited market so Sony will need to get the price down quickly in order to reach a bigger market.”

So, how did Sony do? In the humble opinion of this writer, they did alright in the end. The sparse attendance at many midnight launches across the UK and the rest of Europe has to be very worrying news for Sony. The PS3 will need to garner some more excitement and passion amongst fans than that if it is to succeed. Whilst the sales are good, the hype around the system is far from excellent. It is a much better start than expected, but Sony have a long way to go yet.

Article by James Temperton


ScootaKuH Banned Posts: 1,825 Join Date: Feb 2007 Location: England PSN ID: ScootaKuH	03-31-2007, 11:21 AM There is finally some good news in there. Ok so it wasn't the huge success Sony were hoping it would be but the console war is far from over and I still believe the PS3 will hit back big time. If Insomniac's words are true and the 360 has already peaked and the Wii really is just a fad, then the future could be very bright indeed for the Ps3. I suppose only time will tell. I have my fingers crossed. I love my shiny black behemoth

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