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Has Sony Failed to Maximize the PlayStation Brand?

By: Benzinga
Posted: 3/23/2013 11:20:00 AM
Referenced Stocks: AAPL;AMZN;GME;MSFT;SNE

In 1995, Sony (NYSE: SNE ) gave birth to a brand that became one of the strongest and most resilient around the world - PlayStation.

Not since the creation of the Walkman had Sony produced a machine that held so much power and fostered so much fan loyalty. The PlayStation 4 event, which was streamed live on February 20 to more than eight million people , achieved higher ratings than many TV shows.

In fact, it was watched by more people than NBC's entire Thursday night lineup .

More than 26 million people watched the debut PlayStation 4 trailer on YouTube last month, making it the most watched ad on the website. The trailer proved to be more popular than an ad from Samsung Mobile USA, which was viewed 21 million times.

More than 600,000 people have signed up for GameStop's (NYSE: GME ) "First To Know" list, which provides subscribers with info on when they can pre-order PlayStation 4 hardware, games and accessories.

Fizziology, a social media research firm that has a remarkable track record in predicting box office success, expects PlayStation 4 to be very popular this holiday season.

All of this points to a couple of things. First, it reinforces the strength of the PlayStation brand. Any doubt that investors may have had was washed away the moment Sony unveiled the new console.

Second, it shows that consumers are confident in Sony's ability to deliver a desirable game machine after only a few games were introduced.

Despite this achievement, PlayStation's success seems to be limited to game consoles and the company's first handheld, PlayStation Portable.

PS Vita, the company's second handheld, struggled at retail last year. The unit recently experienced renewed interest and rising sales in Japan after the price was cut in that nation, but the device still has a long way to go before it can match sales of the PSP, which topped 76 million .

The same cannot be said for PSPGo, the weird alternative to the original PSP. Instead of adding new features to the mix, PSPGo discarded the UMD (Universal Media Disc) slot. Sony also modified the form factor, creating a slide-out gamepad that resembled the slide-out keyboards of old smartphones.

Consumers were not enthused by this device, which quickly disappeared from the market and is frequently referred to as a complete flop .

After releasing the PSPGo, Sony was inspired to develop an Android phone with a similar design. While the device was promising, it flopped as well.

Sony has been reluctant to release sales data for its first motion controller, PS Move, but the company's UK managing director implied that sales could have been better.

In March 2012, IGN reported that Sony had shipped (not sold) a total of 10.5 million units. Sony has not provided any further updates regarding how the controller is performing.

Ten million might sound like a lot, but it is less than half of the 24 million Kinect units sold by Microsoft (NASDAQ: MSFT ).

PocketStation, an unusual memory card peripheral that featured a tiny screen, seemed to be a hit after selling a few million units in Japan. Sony had contemplated a worldwide release but decided to discontinue the device instead.

All of these were lost opportunities to further the PlayStation brand. While Amazon (NASDAQ: AMZN ) has successfully evolved the Kindle beyond its e-reader roots, and while Apple (NASDAQ: AAPL ) has taken its iDevice concept beyond Macs and MP3 players, Sony has been unable to take the PlayStation brand to another level.

The new console will do very well at retail. It might even break a few sales records. Unless something changes, however, that may be as far as the brand goes.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis@benzingapro.com. Follow him @LouisBedigianBZ

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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