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Hardware Makers Sony Case Compejjon Summer 2014 James B Hardware Makers Sony Case Compe22on Summer 2014 James B. Storey Kelley School of Business The Market Leader? Not so much. Nintendo Stock 2002-2012 DSi 3DS NGC Wii DS Price Cut Source: Morningstar Quotes Nintendo Stock 2012 Wii U NA launch Launch announcement Nintendo Stock 2013-14 Last Price (1/15/14) $18.20 MicrosoT Stock Last Ten Years Xbox Kinect 360 W7 RRoD 360 S Source: Morningstar Quotes MicrosoT Stock 2012 Win 8, Surface, and Windows Yammer Phone 8 public launch purchase ($1.2 bil) MicrosoT Stock 2013-14 Xbox One Launch Sony Stock 2002-2012 As of spring 2012 PS3 PS2 PSN slim breach PS3 slim Vita PSP PSP Go Source: Morningstar Quotes Sony Stock 2012 “One Sony” Plan, Kaz Hirai CEO $380 million purchase 7th straight quarterly loss Sony Stock 2013-14 PS4 Worldwide Launch Company Strengths Weaknesses -recognizable IP, nostalgia -yen to dollar exchange rate -family friendly -lack of 3rd party support -1st party Japanese studios, including EAD -hardcore gamer disappointment with Wii and Miyamoto -percepFon of technological inferiority -market dominance in handheld and -unreasonable expectaons for innovaon console sales -franchise fague -massive cash on hand -will demo make jump to next-gen? -first mover on moFon controls, 2nd screen -a generaon behind in online -“Evergreen” Mario, Zelda Ftles, especially infrastructure on handhelds -early launch of WiiU, .5 generaon -3rd party relaons -Kinect alienates target demo -ease of development -relave lack of 1st party studios -massive corporate resources -shareholder sway -huge markeFng budgets -no presence in handhelds. Li^le in -proprietary graphics tech (DirectX) phones. Nonstarter in Japan. -dominance in FPS genre -franchise fague (Halo eclipsed by CoD) -top-selling console in NA in 2011 -impression of inferior hardware (RRoD) -mature, profitable, closed XBL -closed online upsets Valve, EA -Windows integraon likely -willingness to fight tech bale or desire to -so\ware company chase Nintendo’s market? -largest, most talented 1st party studios -current company financials -owns hardware plants, controls BoM -yen to dollar exchange rate -percepFon of high-end products -ten-year lifecycle PR -blu-ray + cell advantage (dwindling) -PSP piracy and poor sales in NA -legacy IP, brand recogniFon -slow Vita launch -movie and music studios (untapped) -PS3 ports of 3rd party Ftles -’open’ online (Steam partnership) -poor PSMove sales -’free’ PSN, Gaikai infrastructure -6 mil deficit in NA from arriving year late -handheld presence -2011 sales below expectaons -Europe and Japan -burdened by underperforming TV sales -technical innovaon, despite loss of -poor performance in phones (Xperia Play) Kutaragi. -execuFve turnover (Stringer -> Hirai) Legacy Intellectual Proper2es Mario, Mario Party, Mario Kart, Fire Emblem, Earthbound, Zelda, Donkey Kong, Kirby, Kid Icarus, Pikmin, Smash Bros, WiiPlay, Metroid, Animal Crossing, Nintendogs, StarFox, Punch-Out! Age of _____, Halo, Flight Simulator, Banjo- Kazooie, Conker, Crackdown, Blue Dragon, Lost Odyssey, Fable, Forza, Kameo, Kinect ____, Perfect Dark, PGR, Shadowrun, Zoo Tycoon, Viva Piñata, Gears of War (owned by EPIC) Killzone, LBP, The Order: 1886, Bloodborne, Uncharted, inFamous, Twisted Metal, Warhawk, Sly Cooper, The Last of Us, Ico, Shadow of the Colossus, Motorstorm, SOCOM, Gran Turismo, God of War, Syphon Filter, Jak and Daxter, Ratchet and Clank, Resistance, MLB: The Show, Pixeljunk, Singstar Console War Worldwide Sales 2013 160 140 120 100 80 5th Gen 6th Gen 60 7th Gen 40 20 7th Gen 0 6th Gen Nintendo 5th Gen Microsoft Sony Sega A note on sourcing: NPD, shipped vs. sold-through Console Worldwide Sales March 2014 PS4 7.2 Million XB1 5.2 Million WiiU 6.2 Million* *Year head start Console Worldwide Sales March 2015 PS4 22 Million XB1 12 Million WiiU 9.5 Million Source: Leaked NPD totals (NeoGAF) .
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