Situation Analysis

Internal Environment
Key Executives
Ryoji Chubachi: President and Electronics CEO
Howard Stringer: Chairman and CEO
Katsumi Ihara: Executive Deputy President, Officer in charge of Consumer Product Group
Yutaka Nakagawa: Executive Deputy President, Officer in charge of Semiconductor and
Component Group
Nobuyuki Oneda: Executive Deputy President and Chief Financial Officer
Keiji Kimura: Executive Vice President, Officer in charge of Technology Strategies, Intellectual
Property and Electronics Business Strategies
Nicole Seligman: Executive Vice President and General Counsel
Board of Directors
Howard Stringer
Ryoji Chubachi
Katsumi Ihara
Yotaro Kobayashi
Akishige Okada
Sakie T. Fukushima
Yoshikiko Miyauchi
Yoshiaki Yamauchi
Sir Peter Bonfield
Fueo Sumita
Fujio Cho
Ryuji Yasuda

Employees
Gamestation has over 163,000 (according to CNN) employees in many fields ranging from gaming
hardware and
software, other entertainment hardware, music and movies, business people, and so many more.
External Environment
Customers
The main customers for Gamestation’s ULTIMA X are the hardcore gaming community. These people
are usually men
from the ages of 15-30. However, with the Playstation 3’s support for Blu-ray technology, the secondary

customers would be those interested in the highest quality of movie entertainment; this group could be
anyone of any age.
Competitors
Gamestation’s two big rivals in the gaming industry are Nintendo (who have been in the gaming business
for
over 20 years) and Microsoft (who have only been in the console gaming business for less than 10
years). With this heated competition, Gamestation is forced to give their customers the latest and greatest
in
gaming technology and experience.
Media
The media has had their eyes on Gamestation long before they began in the gaming industry. The media
can
help promote Gamestation’s games and hardware; however, it can also be the reason sales decrease. It all
depends on what the media happens to be focused on that week. Either way, the media is one big
reason why people know about the work Gamestation is doing in the gaming industry.
Suppliers
Gamestation relies heavily on its suppliers to get their raw materials and some pre-constructed parts so
they can
develop and produce their gaming hardware and software. Some of these suppliers include Nvidia
(graphics cards), IBM (processor), and Terra Soft Solutions (operating system). Gamestation has had a
long
relationship with most of its suppliers and has understood the importance of those relationships.
Distributors
Gamestation does sell some of its own hardware and software from online. However, the largest amount
of
their sales come from distributers such as Wal-Mart, GameStop, Amazon, and more.

SWOT
Strengths
1. Always giving their customer the latest and greatest gaming hardware and software.
2. High-quality hardware outlasts most of its competitor’s hardware.
3. Attuned to what their hardcore gamers’ wants are.
Weakness
1. Their high-quality hardware = high prices (ULTIMA X starting price was $600).
2. Their gaming software being on the new Blu-ray format causing ULTIMA X software prices to be $60-
70 each.
Opportunity
1. With Nintendo unable to meet demand for their Wii, the ULTIMA X’s lower price could convince
people waiting for Wii’s to buy available ULTIMA Xs instead.
2. If they are able to get a higher customer turnout, they may be able to lower their prices to other
game standards on software to increase ULTIMA X software sales.
3. With the recent movie format war being over between Blu-ray and HD-DVD, Gamestation could get
more movie companies onboard with Blu-ray to increase the ULTIMA X’s attractiveness to movie
buffs.
Threats
1. People who were interested in ULTIMA Xs are quickly turning to the Xbox 360 to meet their budget
gaming needs.
2. The economy is hurting the sales to gamers everywhere. Currently, Nintendo is feeling this in
their handheld market, but this could quickly threaten the ULTIMA X’s sales.

Marketing Objectives
The first year of the ULTIMA X has been a little less than expected. The high price of the hardware is
partly to
blame for this. To approach this issue, Gamestation has lowered the price of the hardware in recent
months in
hopes of increasing hardware and software sales. With demands for the Nintendo Wii not being met,
this lowered price will hopefully steal away some of the market share from Nintendo. Also with the
video format being over, Blu-ray sales should increase and more film companies should jump onboard
with Gamestation’s Blu-ray format; this should in turn increase ULTIMA X sales since its’ price is lower
than many or
comparable to stand-alone Blu-ray players. This will help expand the ULTIMA X’s customer reach.
Marketing Strategies
Select Target Markets and Positioning
Gamestation uses the newest and greatest technology to appeal to their customers. The people who are
most
interested in staying up-to-date with the newest technology are usually men of the ages 15-30. To reach
that market, they make games that are attractive to men of those ages; these games tend to be the
shooters and high action games such as Kill Zone and God of War. However, they do make games for
younger children; these games have a more adventure based game play such as Jak and Daxter and
Crash Bandicoot.
Beyond gaming, Gamestation also hopes to reach movie buffs with their high-definition movie playback
thanks
to Blu-ray technology. Blu-ray offers the latest advancement in movie entertainment experience. The
detail of these movies is so good that you can literally see individual pores on people’s faces. As you
might expect, this means detail on everything is very high and movie buffs love this.
Product Strategies
The ULTIMA X offers the most advanced visuals and audio of any other game console and most
computers.
Hardcore gamers want their games to be more visually pleasing, and that is exactly what Gamestation has
given
them. They have changed very little about control setup except they have added some motion
sensitivity (after they saw Nintendo unveil this feature in the Wii); this means that people who have
played PS1 and/or PS2 won’t have to learn how to hold and use the controller all over again. Also, there
are a lot of classic games available for download via the Playstation Network (for a price of course). Also,
later models offered backwards compatibility with PS1 and PS2 games.
They have included Blu-ray playback as a feature on the ULTIMA X. This will tempt people on the
market for a
Blu-ray player to potentially buy the ULTIMA X instead since its’ price is very close or cheaper than
current Bluray
players.

Pricing Strategies
Though it has proved to be less successful than hoped, Gamestation started the ULTIMA X at a very high
price of $600
and software at $60-70. Their hope was to get much of what they spent on the ULTIMA X back in a
quick time
from those eager enough to adopt the new gaming system. However, the numbers were lower than
expected. Gamestation then lowered the ULTIMA X price hoping to increase sales. Gamestation seems to
be using the Market
Skimming Pricing hoping to get as much as possible from each market. Since Gamestation is one of the
top name
brands, this technique was very worth using.
Promotional Strategies
Beyond the great graphics and familiar game play, the main selling point of the ULTIMA X is the Blu-ray
play
back. The fact that you can buy a gaming system and are able to watch movies on it too is a great thing.
This was the same way with the PS2; thousands were sold worldwide just as a DVD player since it was
backed by Gamestation’s nice warranty and was made with the wonderful Gamestation touch.
Gamestation also has the Playstation Network that offers downloadable games. This feature allows them
to sell
point cards containing point which can be used to download classic PS1 titles, custom games, and
sometimes downloadable features such as extra songs for games like Guitar Hero. This same feature
also allows players in two different countries to play a multi-player game against each other via Wi-Fi.
The ULTIMA X also offers many games that have link support for using the PSP (Playstation Portable)
for extra
features or as a substitute controller via wireless. Gamestation also supports backwards compatibility with
PS1/PS2 games.

Supply Chain Strategies

Gamestation buys parts from different suppliers to construct the ULTIMA X’s.
Gamestation then constructs the ULTIMA X units in Japan.
After repeated testing, Gamestation begins selling the ULTIMA X in Japan and in the US shortly after,
and so
on.
From here, they are taken and sold at the different distributors.
11
Implement and Control the Marketing Plan
Action Plans
Taking full advantage of the shortage of Wii units, Gamestation is trying to make sure there are ULTIMA
X on shelves
at all times. Also, they have lowered their prices since their release in hopes of getting people to buy
ULTIMA X
instead for all of its features. Prior to the release of the ULTIMA X, Gamestation saw Nintendo’s
innovative idea for
motion sensitivity; after this, they went back to the drawing board and added some motion sensitivity
support to their controller.
In an effort to increase sales vs. the Xbox 360, Gamestation is pushing the point that they have had third-
party
support for great games such as Metal Gear Solid series and the long line of Final Fantasy titles. The fact
that ULTIMA X Blu-ray disks hold nearly five times the amount of information as the other two system’s
disk
(both Nintendo and Microsoft stuck with normal double layer1 DVD’s), this helps show how in-depth the
ULTIMA X games could potentially be.
Responsibility
Since Gamestation knows the importance of solving problems such as Alzheimer’s and cancer,
Gamestation has built a
feature into the ULTIMA X (that can be disabled) that, when your ULTIMA X is not in use and has a
high speed
connection, allows Stanford University to use your ULTIMA X’s hardware to help conduct research on
their
Folding@home project. This project has been around since 2000 and has been using people’s (who
signed up) computers to help in this research. Since a lot of computers go unused and left on around the
world, Stanford uses that technology to help in computational research on these and other diseases.
This feature will not only help fight diseases, but will give the ULTIMA X owner a since of satisfaction
knowing
they are helping fight these diseases and are helping get one step closer to finding a cure. This
information was provided by an article by Mike Nagle.

Measurement and Control

Beyond just the sales figures telling Gamestation how well their ULTIMA X hardware is selling,
sales figures
for their games, Wi-Fi connection activity levels, the number of downloaded games, and
customer feedback let Gamestation know how well the ULTIMA X hardware is really being
received by the
consumers. From this feedback, they make needed software fixes in the form of system update.