PlayStation 3 price drop helps quadruple sales
PHYSICAL: Ad campaign promotes console's Blu-ray, Web-connection abilities
By Susanne Ault -- Video Business, 9/23/2009
SEPT. 23 | PHYSICAL: Sony’s PlayStation 3 is heading into the holiday sales season with momentum from a massive TV campaign underway and a $100 price cut that has helped triple unit sales in recent weeks.
In three weeks at $299, PS3 unit sales jumped 300% over the three weeks prior to Sept. 1, notes Sony. Plus, the company reports a halo effect, as hardware revenue for all PlayStation products surged 140% during the first week of September versus the previous seven-day frame.
To publicize its new $299 pricing, effective Sept. 1, Sony kicked off a series of nine TV spots that each stress a different benefit of the PS3. At least one Blu-ray-related spot should air in November and December, tied to when the studios release some of their biggest 2009 movies in the format, including Star Trek on Nov. 17 and Harry Potter and the Half-Blood Prince on Dec. 8.
“This has been an unqualified success for us,” said John Koller, director of hardware marketing at PlayStation. “Many retailers are saying this is because of the price drop, but they also think that the marketing campaign is also having the effect of bringing people into stores.”
Sony hopes its campaign, dubbed ‘It Only Does Everything,’ will keep driving sales through the holidays, despite the uncertain economy and new competition from Nintendo's Wii and Microsoft's Xbox 360.
The sluggish economy has cut into the once red hot videogame category, in which combined year-to-date software and hardware revenue through August are 14% below their record 2008 pace, according to NPD. Last month, Xbox 360 Elite dropped to $299 after a $100 price chop. Nintendo’s Wii is expected to fall by $50 to $199 starting Sept. 27.
Sony is pushing the PS3 attributes not replicated in other consoles, such as its built-in Blu-ray Disc player. Also, Sony is hoping the ads collectively underscore that PS3 is an all-in-one set-top that offers traditional videogaming, Blu-ray movies/TV and downloadable games/movies/TV via a built-in wireless connection.
“The objective of the campaign is to ensure that the consumer walks out of the store with a PS3 fully knowing all that their PS3 offers,” said Koller. “In the past, we’ve noticed that some consumers knew there was gaming but nothing else. We didn’t think they knew the totality of the experience.”
At this point, the company has run two spots. One announces the $299 price, and another focuses on downloadable content through the PlayStation Network. Other upcoming ads promote family gaming and new software.
The target audience for the ads comprises PlayStation 2 owners, which Sony believes are primed to make the upgrade to the now-cheaper PS3. To reach this consumer segment, Sony purposefully struck a comedic tone in its campaign, harkening back to PS2’s irreverent image when that console was launched. For example, the $100 price cut ad (see below) pokes fun of Sony’s ongoing denials of what had long ago been expected.
PS3’s earlier marketing efforts were more serious in attitude, simply stressing the hardware and using little dialog.
“We are looking at the PS2 consumer who may have not yet made the transition to PS3. So we are going back to our tone roots,” said Koller. “There is a snarkiness to our ads, which we had more of with the PS2. There is a nostalgic feel to it.”
