Sony Playstation 3 Sales Skyrocket!

http://in.reuters.com/article/technologyNews/idINIndia-42693820090925



Summary:

After the Playstation's 3 Initial relaunch a couple years back, they have been suffering from the popularity of Wii and Xbox360. At one point, even the sales of Nintendo DS portable game device surpassed the PS3. Supply was exceedingly high, and the demand was significantly low. Even the project leader described how Sony has lost a lot of projected profit due to the other console competitors. All these problems originated from the high price tag. However, Today is a different story. Sony is back with a slimmer, cheaper, more efficient, Play station 3 Slim. The Slim is more than just a PS3 on diet. The materials used to construct the slim are far cheaper and thus allows for a lower price. Not only this, but the old PS3's have a price cut. On top of all this, Sony worked hard and released a new software upgrade for all PS3s allowing for a far more sophisticated User and Community interface. The goods don't stop there, new titles that are exclusive to PS3 have gotten most 360's users to switch over. Now with the demand of PS3 skyrocketing and supply dropping incredibly fast, what will Microsoft and Nintendo do? How long would this economic paradise last for Sony?



Connection:

Demand and Supply is crucial in every business. With a simple drop in demand and increase in supply, the company's profit can evaporate. Sony's demand was high at the initial launch of the console. Sony thought everyone appreciated the PS3 and won't mind shelling out 400$ for a console. This turned out not to be the case and it was only the die-hard Sony fans that payed the full price. Rest of the people resorted Wii, 360, and sales. This shows that demand fluctuates quickly and if your company isn't prepared to take the hit, then they might loose it all. Sony happends to be financially strong due to thier success in many other categories of technology. Without this support, we may have never gotten the PS3 Slim and Price Cut we have today. Sony sacrificed alot of their profit in order to gain the crowd back. This also goes to show that when your supply is exceedingly high, you must sell out your stocks even if that means no profit, at least its better than loosing money.

Reflection:
In my opinion, Sony tried to take advantage of the PS3's initial demand too much. Simply because the demand for a certain property is currently high does not mean it will always be that high. When you increase to price so far and have competitors that offer better deal for the money, all demand is lost. What you will be left with is a bunch of supplies that must be sold at a non-profitable price.
Demand and Supply are very important when we go shopping. If people had known that Sony must lower the price of the PS3 then they would've held off and waited for the price cut. Unfortunately a lot of people didn't understand the concept of demand and supply and did not expect Sony to lower the PS3 price. This resulted in quite a few people disappointed for their $400 PS3 while others that understand the market a bit better, paying only half the price for a PS3! Demand and Supply is closer to your life than you think!