Sony’s eager to regain the unquestioned leadership in the console business it enjoyed back in the PlayStation 2 days. Since that time, the company has struggled against larger corporate issues (the massive losses in the television business, tough times in the movie business, missteps in mobile devices) while losing the console leadership to Nintendo’s Wii (and in the USA, to the Xbox 360). The PlayStation 3 was powerful yet expensive initially, and the complicated architecture made it hard for developers.
 Now Sony is looking to correct the problems of the past with the PlayStation 4, seeing in this console a chance to regain leadership in the console business, secure a stronghold in the family room, and help bring Sony back to profitability while burnishing the company’s brand. So far, the company has revealed basic hardware specs for the PS4, and featured some partial game demos and enthusiastic developers at its initial unveiling in February.
Going into E3, Sony knows that Microsoft is going to come at it full force with a very competitive console and the ability to spend massively on marketing. Plus, Microsoft has timed its console unveiling to be close to E3, hoping to dominate the media between now and the show. Sony needs to put on a powerful E3 performance to blunt Microsoft’s momentum and regain the spotlight.
Realistically, neither Sony nor Microsoft should expect to run away with a clear lead in buzz after E3. Both companies will be showing lots of games with spiffy graphics and interesting features; some of the games will, probably, be the same titles. The biggest titles from Activision and EA and Ubisoft aren’t going to be exclusive to any one console, after all. The consoles from Sony and Microsoft are going to have the same basic architecture (the CPU and GPU), and probably similar I/O, memory, and storage. Sure, there will be differences in controllers, and motion detection and other features, but there won’t be immense differences.
There lies Sony’s first challenge: Differentiate the PS4 from Microsoft’s console. Journalists (especially mainstream media) will tend to lump them together; what’s key will be the differences that get mentioned. Sony’s task is to make sure that people talk about the PS4, they mention key things about it that Microsoft’s console doesn’t have. (Perhaps the controller’s Share button The touchpad The network features ) Sony needs to clearly identify its key advantages and make sure everyone knows them — and agrees that those features are key reasons to buy the console.
We can expect an array of software in various stages to be shown at the show. One of the key selling points is going to be the starting lineup of software for the PS4; what will you actually be able to play this Christmas (And the answer better not be “Ridge Racer!”) Sony has some strong studios that should provide interesting exclusives. Sony will be leaning on exclusives to sharpen the distinction between the PS4 and Microsoft’s offering.
Sony may or may not reveal details of its marketing plan at E3. Usually, that’s not considered to be something the media or the consumers are interested in, but it’s something retailers are keenly interested in. What sort of marketing spend will Sony commit to How much TV advertising Who’s the target audience The big retail chains will certainly want to know these things, but Sony may keep that a secret until later, in order not to give Microsoft any help in figuring its strategy.
Sony will be more constrained than Microsoft when it comes to budgeting. While Sony has eked out a modest profit for the fiscal year, that was achieved mostly through the sale of assets and careful cost controls. Until the good times return, Sony’s going to be careful with its spending. The PS4 launch is important, though, and will likely command a healthy budget. It will almost certainly not be all Sony marketers could wish for; they will have to be creative to get the most impact.
The biggest weapon in the marketing arsenal is, of course, the price point. We may or may not see pricing announced at E3. On the one hand, if Sony announces a relatively low price (like, say, $349 or even $399) and Microsoft doesn’t announce a price (or does, and it’s higher), Sony will get a solid head start in winning consumer hearts and minds. On the other hand, what if the yen suddenly drops in value; Sony could wind up losing a lot of money if it chooses a price for the PS4 too soon.
It’s quite possible both Sony and Microsoft may wait a while longer to reveal pricing; this gives the competition less time to craft a strategic response, after all. However, it’s unlikely that Sony will be pricing the PS4 to lose a lot of money. The company just can’t afford that sort of investment right now. Microsoft has piles of cash in the bank so it can afford to take a loss, but the company’s recent pricing of its Surface tablets shows it’s reluctant to lose money on hardware even to buy long-term market share.
Sony has also hinted that the PS4 will maintain a solid price point, which probably means that the PS4 will be more like $400 or $500. Ultimately, though, Sony will probably stress value: if you get any games or other content with the console, for instance. The company could decide to pre-load content on the PS4 hard drive to give consumers a taste of the various media (games, movies, music) it’s possible to buy on the console.
Sony’s initial February event was relentlessly focused on games, games, game designers, indie games, and games. Oh, and the PS4 also plays games. Did we mention games You may be forgiven if you aren’t sure whether the PS4 plays movies or music, too, because Sony sure didn’t spend a lot of time on that. Sure, E3 is focused on games, but if Sony expects consumers to shell out hundreds of dollars for its new console hardware, they’ve got to show people the PS4 plays movies and music and sports just fine, thank you. Just how much Sony chooses to showcase the non-gaming features of the PS4 at E3 will tell us a lot about how the company intends to market the PS4 to consumers.
It will be interesting to see how much effort Sony puts into the PS Vita for E3; that will tell us how important Sony considers that device to its holiday success. This could be a chance to effectively relaunch the PS Vita, stressing its connectivity with the PS4 and ability to play PS4 games remotely. Or, Sony could ignore the PS Vita in favor of the PS4, which would effectively mean that Sony has given up on the PS Vita and is letting die a natural death. Watch the Sony E3 presentation carefully, and see what percentage of it is devoted to the PS Vita. That will tell you exactly how important Sony considers the PS Vita, no matter what they may say later. That event time is precious, and will be measured out to precisely what Sony thinks will provide the best return on that time investment.
The holiday season will be marinating in game marketing, between the three big console players, upstart Android consoles like Ouya and GameStick, AAA titles like Call of Duty: Ghosts and Battlefield 4, and a slew of tablet and mobile hardware and games. Sony’s challenge is to find a way to stand out in the crowd and convince consumers to drop hundreds of dollars on what may well be the last console the company will ever produce. This will require a clear message, compelling value, and the resources and creativity to get that message to every possible target. Will Sony pull it off We’ll check in after the dust settles from E3 and reassess the situation.
