Strategy and Innovation for Sony PlayStation Portable. A Case For Change.

1. SONY PLAYSTATION
PORTABLE
Pranav Sabhaney
MA - Digital Media Management

2. SONY PSP
The Product
Market & Other Players
The PSP lets you access games, videos, music and photos at anytime and lets you share them with your
friends.
The offering is great value gaming while on the go.
The PSP is the only handheld video-game console to use an optical disc format – UNIVERSAL MEDIA DISC as
its primary storage medium.
Other interesting features are its large viewing screen, infinite multi-media capabilities and connectivity with the
Playstation2, Playstation3, other PSP’s and the Internet.
Sony’s PSP is in the portable gaming/handheld gaming console market space.
These are consoles smaller than video game consoles and contain the console, screen, storage, buttons and
speakers in one unit allowing people to carry it anywhere, anyplace.
There are quite a few players in this market and of the many the most notable one is the Nintendo DS
Sony's biggest competition is likely to come from Nintendo's newest portable system, the Nintendo DS.The
DS features two screens, one of which is a touch-sensitive pad like you'd find on a laptop.The screens can also
be used for innovative game design, showing different information on each of the screens.

3. HARMFUL BELIEFS
Sony PSP
They firmly believed that they were in the industry of Portable Gaming/Handheld Gaming Consoles
They had a strong belief that Nintendo was their biggest competition
Loyal PlayStation users and Gamers On-The-Move were believed to be their customers
The value they thought they provided was a high quality gaming experience while traveling

4. CASE FOR CHANGE
Decline in Revenue
It has been a tumultuous life cycle for the PSP. It started off being lauded as the ‘future of handhelds’ and a
sure-fire successor to the throne that had been occupied by Nintendo pretty much since the beginning of time
when they released the Gameboy.
Sony's PSP has been suffering declining hardware and software sales of its own. From 2005 through 2008, the
handheld has achieved sales of nearly a million units in the U.S. in the final month of the year. Yet in December 2009
Sony sold just over 650,000 of the handheld.

5. CASE FOR CHANGE
Disruptors
Digital content distribution has disrupted several notable industries.With the original iPod and the iTunes
store,Apple changed the face of the music industry. Likewise, digital content distribution has starkly disrupted
news, magazines, books, shows, films and more.
Recently the portable gaming industry has taken the biggest hit. Leading the disruption are iOS and Android
devices, with its free and inexpensive games accompanied by mobile and tablets form factors and have
already disrupted billions of dollars of game revenue.
Portable gaming primarily has been dominated by Nintendo with the DS and Sony with the PlayStation Portable
(PSP)
In this model, at retail, consumers pay around $200 for the gaming device and up to $40 for popular game
cartridges.
Apparently, Christmas morning
went like this for a ridiculous
number of people.Wake up, go to
tree. Unwrap smartphone. Give
requisite thanks. Immediately
download Angry Birds.That
approximate scenario, according to
Rovio happened 8 million
times.

6. DISRUPTION
MOBILE GAMING
smartphone
tablets
download
stores
The most striking trend is that iOS and Android games have tripled their
market share from roughly 20% in 2009 to nearly 60% in just two years.
Simultaneously, Nintendo, the once dominant player, has been crushed down to
owning about one-third of market in 2011, from having controlled more than
two-thirds in 2009.
The freemium game model is revolutionizing and expanding revenue on
mobile devices.And just as smartphone game revenue has climbed
aggressively, Nintendo DS and Sony PSP revenue has dropped
precipitously.
Smartphones are now capable of delivering a good quality gaming experience
especially at the casual end of the market.This pushes dedicated consoles into an
even smaller niche.
The new trend - Low Quality over High Quality which translates into
Accessibilty

7. WASTE &VALUE GAPS
What are value
gaps?
Things customers don’t want
Things not done
Things done badly
Things done expensively
Things done inefficiently
Things done disconnectedly
Waste ofTime & Energy
Environmental Waste
Human Waste – Fears, Doubts and Uncertainties
I don’t
need a PSP. My
iPhone does the
same and
more.
Karan Reddy, 22
I love
gaming in my
free time but
the PSP is a
waste of my
money.
Gustavo Bechtold, 28
It takes up
so much space
in my bag. I’ve
hardly been
using it.
Wastage
Based on some ethnographic research and a brief customer activity cycle, it was noted that the PSP despite
offering services such as WiFi, Internet,Audio andVideo, the customers preferred to buy alternatives like the
iPhone because the mobile enables them to do multiple tasks efficiently.
The PSP was looked down upon because of reasons such as waste of money, waste of space, fear of it not
being durable and the fact that the UMD’s were expensive as well.
The users did not look at the PSP for multipurpose usage.
Mayanka Somiah, 24

8. CURRENT SITUATION
Sony PSP as a Track 1 company
PRODUCT FOCUSED
The sale is the end transaction where value is provided
Innovation is based on incremental improvements in product and service - From PSP to PSPGo to PSPVITA
CURRENT JOURNEY
user
retail store/
internet
retail store/
internet
to buy console to buy game
PlayStation
Network
to play against friends

9. OPPORTUNITY
Current Market
Space
Portable gaming and Handheld consoles
Future Market
Space
Control over home environment while on-
the-go
Convenient
Home Solutions
universal
remote
home
security
“From a PRODUCT oriented market space to a
CUSTOMER focused market space”
TO

10. CONTROL OVER HOME ENVIRONMENT WHILE ON-THE-GO
Universal Remote
The PlayStation Portable currently offers a vast array of features such as WiFi,Audio andVideo, Connectivity to
the PS2 and PS3 and connectivity to the television or computer as well.There are various usages but is pre-
dominantly used for gaming.
A household insight is that people do not like too many remote controls because more often
than not they get lost or spoilt.
The solution is for Sony with it’s PSP to become a UNIVERSAL REMOTE that could control every household
product/service like the Fridge,Television,AirTemperature Control, Microwave, Electricity,Water.
This solution dismisses the problem of having too many devices for multiple purposes.This also solves the
problem of space and money.
The user can now access everything he/she owns with the touch of a button.
Solution 1

11. CONTROL OVER HOME ENVIRONMENT WHILE ON-THE-GO
Home Security
Sony has a wide range of electronic products which belong to both sides of the money chain. People get attached
to things that they own or are close to them and hence take care of those thing more.
It is a normal human behavior to be secure of the things they own and hence have a peace of mind and be able
to carry on each day almost hassle free. Sounds like a dream but currently is not at its best.
Voila!The solution - SONY PSP is a device that is portable and can be used/accessed while on-the-move.
Sony would tie up with a home security system and get access to the technology they provide.The PSP will then
be the platform the user uses to keep a check on his/her home. Even when they are on-the-move and away from
home, they have complete control.
It works as a simple notification system. If the house is being robbed, then the user will be immediately notified
and then in turn can alert the police.This smart system will be useful to the user because they can activate/
deactivate anything they want in the house as well as notify authorities as soon as possible.This doesn’t allow
delay and hence in turn protect and safeguards the user’s property.All this can be achieved and still the user can
enjoy the PSP and play games.
Solution 2

12. HOW WILLTHIS DRIVE UP REVENUE ?
CONTROL OVER HOME ENVIRONMENT WHILE ON-THE-GO
simplicity accessibility
beyond
gaming &
youth
internet
as purchase
platform
The user interface of
this will be so simple
to use and the sheer
simplicity will attract
consumers to
purchase the product
because it doesn’t
require them to be
tech savvy.
Carrying on the
tradition of the PSP
of it being accessible
anywhere, anyplace
and anytime, the
solutions provided
will be easily
accessible to the user
and will have full
control and access
over their home.
The PSP was
targeted to a niche
segment (youth).The
solutions provided
help enable every
kind of individual to
have access and full
ownership and
control of their
home.This is a
solution which
attracts all age
brackets.
The vast growth of
internet consumption
and purchase of
electronic goods(via
Ecommerce) will be
the vehicle that will
help in promotion
and purchase of the
solutions.

13. FROM AN OS1(PRODUCT FOCUSED)TO AN
OS2 BRAND (CUSTOMER FOCUSED) AIMINGTOWARDS BEING OS3

14. SUMMARY & STRATEGIC RECOMMENDATIONS
The Desired Outcome
Market
Space
The NewValue Chain
Pushing Sony towards providing a breakthrough value in the form of the home security solution and the universal
remote. From selling a portable gaming console to providing the best solution of controlling home environment. From
being product focussed to being more customer oriented.
Initially the PSP was targeted to a small yet niche audience (gaming centric) but now they will attract all kinds of
people and maybe explode into the woman market with a product that was initially designed to never attract them.
The Home Security solution works like a concierge service as well. So, the relationship with the user is maintained
and doesn’t end with the purchase of the PSP.
Opening up doors to a new market space which is waiting to be dominated by Sony.
Effective cost solutions by taking out cost spent on controlling gadgets, remotes by providing a multi-purpose
solution
Customer Activity Cycle

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Official PlayStation website: PSP, PlayStation Portable
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The new value chain model by Paul McCabe

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