Sony Corporation, which usually referred as Sony. Sony is a Japanese multinational corporation that located at Japan. Sony founded on 7 May 1946. The founder is Masuru Ibuka and Akio Morita. Masuru Ibuku started an electronic shop in the year of 1946. It was located at a bomb-damaged department store building at Tokyo. On the year of 1947, Masuru Ibuku colleague, Akio Morita joins his business, and they founded another company named as Tokyo Tsushin Kogyo (Tokyo Telecommunications Engineering Corporation). Until the year of 1958, they changed their company name to Sony. Their business focuses mainly on video games, electronics, financial service sectors and entertainment. Besides that, Sony is also one of the top manufacturers of electronic products in the world when comes to consumer and professional markets. Other than that, Sony Corporation is the parent company to Sony Group, which related to the business in four different segments: Motion picture, Music, financial services and Electronic which included video games, network services and medical business.


                                                   
Sony Computer Entertainment

 When comes to Sony, one of the most amazing product they had made is PlayStation. PlayStation is a video games console that developed and created by Sony Computer Entertainment. Sony Computer Entertainment is the major video game company that owned subsidiary and they are part of Service Group and Consumer Products of Sony. PlayStation was launch during December 3, 1994. The result was great, it become one of the most popular systems among the fifth generation consoles. It eventually sold 102.49 million of it. After this PlayStation, Sony had launched the PlayStation 2 at the year of 2000. The result was greater than the previous PlayStation, it achieve the best home video consoles by selling around 155 million units. Lastly, the latest video console PlayStation 3 was launched in the year of 2006, and had sold over 78 million now.

Platform	Year	Units sold
PlayStation 1	1994	102.49 Million
PlayStation 2	2000	154.5 Million
PlayStation 3	2006	78 Million

-The table above shows the result of unit sold for the three different PlayStation Console throughout the years. (Video Game Sales Wiki,2013)




Latest product: PlayStation 4

Currently Sony is going to launch one of their upcoming video consoles, PlayStation 4. It will launch on November 15, 2013 at North American first. On November 29, 2013, they will launch it at Europe and Australia. Play Station 4 will be launch as a part of the eighth generation and compete with Microsoft Xbox One and Nintendo Wii U.(Rivington, J, 2013) Play Station 4 can be considered as a luxury goods. PlayStation 4 is not a necessary product. PlayStation 4 can be considered as a high quality and price product. Usually people would not spend for it, unless you have to the interest or the satisfaction when they want to achieve a higher level of technology and games. 

Sony Computer Entertainment plan to make approximately 10 to 12 million console annually with the price of $399. Due to the unexpected reasonable price, they actually receive a record breaking pre-order. Besides that, even Amazon, one of the largest online retailers in the world also sold out and unavailable for any pre-order in weeks. (Krawczyk, K,2013) From this point, we can see that it would not meet the demand target and it will make a shortage at the market. When shortage occurs in one region, the manufacturers can increase the supply depend on the willingness on the customer whether they want to spend on quicker shipment and availability of product.
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-The graph above show the shortage occurs when demand is high and there are limited supply.

Usually the demand for PlayStation is affected by the games. Games such as Final Fantasy, Grand Theft Auto, Assassin Creed and other popular game titles can increase the demands and sales of the PlayStation. Not too long ago, the PlayStation 3 exclusive game called "Metal Gear Solid 4: Guns of the Patriots" boosted the sales of the PlayStation from 10856 units up to 75311 units. (Gamespot.com, 2013) Beside that, there are another case that happen recently, when the “PS3 System Super Slim 500GB Grand Theft Auto V” was launch, it also helps the Play Station 3 to boost up the sales and finally they beat Xbox 360 from the leading spot in the U.S market. After the launch of “PS3 System Super Slim 500GB Grand Theft Auto V Bundle” came out, it actually taking the lead to the top spot from Xbox 360. Although Microsoft also come out with the “Xbox 360 Grand Theft Auto V Bundle”, but the price difference Xbox 360 Bundle and Ps3 Bundle will not make any changes. Xbox 360 Bundle is way too expensive compare to PS3 bundle. The Xbox 360 bundle cost $419.97 and the Ps3 bundle cost 269.99. The price difference directly influence the demand for Xbox 360 decreased. (Jutte,G. 2013) As we can see, games are always the main factor that will help to boost up the sales. When comes to PlayStation 4, I bet there are more high quality and well-known game will be released and to attract more customer to purchase the console.

For my personal view, Sony Computer Entertainment is under a monopolistic market structure. Although there are only Nintendo, Microsoft and certain company only can compete with them. Under this market, Sony can be considered as one of the largest company among all. So in order to play against with Sony, Nintendo and Microsoft had come out with their own product to play against Sony. Nintendo come out with the Wii and Wii U. For Microsoft, they had come out with Xbox 360 and Xbox to compete with PlayStation 4. However, there are ample of firms waiting to enter the market each with its own special product or in pursuit of making profits and any firm are not able to cover the costs so it can leave the market without incurring any liquidation costs. This assumption means that there are low start up costs, no sunk costs and no exit costs. The cost of entering and exit is very low in this case. For Microsoft, they had come out with Xbox 360 and Xbox to compete with PlayStation 4. Overall, we can see that Sony is under an inelastic demand in the market. The inelastic demand of video game console is due to few reasons. First, the video game console does not have a lot of competitor, because not many company acquired high technology skills like Sony, Nintendo and Microsoft. Secondly are the features and the quality of the video game console. Sony design and improve most of the features through their additional add-on for the PlayStation. For example, PlayStation Move, “Eye Cam” and special controller for certain game such as Guitar Hero, Rockband, and Dance-Dance Revolution. Sony implemented their high technology skills to make the latest PlayStation become one of the best video game console compared to other.
               
Furthermore, Sony is also the Price Maker. Because there aren't many choice hen comes to video game consoles. For the consumer, there are only few choices when comes to video game consoles. The choices are only Wii, Xbox or PlayStation. But under this market there are a lot of brand loyal customers who are still willing to pay for a high quality product if the price is reasonable. For example, currently Sony will make a loss of $60 per unit sold for PlayStation 3 for $399 at launch, but they expect to immediately recoup the losses through other PlayStation Plus subscriptions and game sales. (Eurogamer.net, 2013)From this point of view, they are not earning any supernormal profit first. The point of doing this is because of few reasons. First, they can make other company no entering this industry by using a low price to make them feel competitive. Second, they are not aiming all the profit from the product, which is PlayStation 4 only. There are other complementary goods such as guitar controller, drum controller and other special controller. These complementary goods can be selling in a good price if the consumer got the willingness to go for it. Besides on those controllers, games also one of the complementary goods. For Sony, they are actually aiming those supernormal profits from the complementary goods.

Lastly, in my opinion, judging from the pre-order sales, Playstation are clearly doing much better despite both product aren't launched yet. Currently, Sony is taking the lead in front of Microsoft. The reason is because Microsoft is losing their credibility to their consumer due to their Xbox One is having a lot unnecessary features and rules. As the result, their customer lost their interested on the Microsoft latest product. Indirectly they also affected the demand for Xbox 360 as well.          

      




-A comparison between the two latest video game console.

References

Eurogamer.net. (2013) Sony expects to recoup PlayStation 4 hardware loss at launch. [online] Available at: http://www.eurogamer.net/articles/2013-09-20-sony-expects-to-recoup-playstation-4-hardware-loss-at-launch [Accessed: 20 Sept 2013].

Gamespot.com. (2013) MGS4 boosts PS3 sales in Japan. [online] Available at: http://www.gamespot.com/articles/mgs4-boosts-ps3-sales-in-japan/1100-6192778/ [Accessed: 24 Oct 2013].

Jutte, G. (2013). Xbox 360 Finally Beaten by PS3 Thanks to GTA V. [online] Available at: http://guardianlv.com/2013/10/xbox-360-finally-beaten-by-ps3-thanks-to-gta-v/ [Accessed: 23 Oct 2013].

Krawczyk, K. (2013). PlayStation 4 Shortage Delays Could Last Four Months. [online] Available at: http://www.ibtimes.com/ps4-playstation-4-shortage-delays-could-last-four-months-1408480 [Accessed: 19 Oct 2013].

 Rivington, J. (2013). PS4 release date, news and features. [online] Available at: http://www.techradar.com/news/gaming/consoles/ps4-release-date-news-and-features-937822 [Accessed: 20 Oct 2013].
Video Game Sales Wiki. (2013). Best selling game consoles. [online] Available at: http://vgsales.wikia.com/wiki/Best_selling_game_consoles [Accessed: 19 Oct 2013].