According to the Marketing Research Association, only 40% of developed products make it to market. Of those 40%, only 60% will generate any revenue at all. Over the decade, SONY has had its fair share of successes and failures when it comes to introducing new products.

There are five key components to a successful product launch strategy and it appears that SONY has been executing well on all five when it comes to the launch strategy of its Playstation VR.

What is the Right Product?

Consumer Electronics Industry is a very competitive landscape. Although CE industry revenue growth has slowed in recent years, from 7.7 percent in 2011 to 1.7 percent in 2013, total revenue crossed $200 billion for the first time in 2012 and shows no signs of retreating below that milestone. Interestingly, high revenue numbers are fueled in large part by a few specific categories while the industry at large has experienced flat growth due to the continued decline in average selling prices. Given this interest around niche product segments, SONY’s choice to focus on the gaming console market is clearly a good one. Playstation VR earlier known as Project Morpheus is an initiative that has seen much tinkering at SONY for a number of years. The project was launched during 2010. It has taken a good five to six years for SONY to continually enhance the product and ensure that it fits into its overall product strategy map when it comes to gaming consoles and gaming related revenues. It shows remarkable focus and patience on SONY’s part as time to market in the CE segment is usually way shorter and companies are quick to launch products in order to gain market share.

Acquire customers before there are customers

This is hard for most companies. SONY has been remarkably good when it comes to the Playstation VR strategy. SONY’s advantage is largely a function of its existing 30+ million gamers on its PS platforms and a very strong partnership with professional game development companies. SONY has managed to create a strong product awareness campaign by focusing on the various VR games that will be available way before the Playstation VR enters the market. A prime example of that is its marketing partnership with CCP Games. When Oculus was launched as a kickstarter campaign, CCP Games was one of the key backers in the drive. In early 2013, the Oculus team was testing EVE Valkryie in Iceland. This is one cockpit game that every gamer is anticipating to try. SONY was also successful in signing up exclusive agreements with CCP before especially in the case of the DUST 514 game. The ability of Sony to carefully partner with professional game developing companies in bringing exclusive value to its play station audience (such as the upcoming Golem VR from Highwire games) has provided SONY with a loyal base of customers that are eager to try the Playstation VR

Gain Customer Feedback before the launch

Although no public data is available around SCE’s efforts related to this area, however one can clearly see the company’s efforts around Playstation VR spec tweaks over the last couple of years. This tweaks were in fact largely influenced by feedback from the various CES and other events as well as SCE’s eagerness to adopt newly available technology when it makes economical sense. The prime example of this can be seen in Playstation VR’s approach to latency issues. In efforts to make sure that the experience delivers a sense of presence and comfort to its players, SONY has been able to reduce its latency to less than 18ms. This is almost half of what the first PlayStation VR prototype had. The 5-inch LCD display of the original prototype WAS REPLACED with a 5.7-inch OLED one that will improve motion blur and enable low persistence. This was showcased at the GDC 2015 and was loved by the customers.

Minimal Viable Plan for balancing Risk and investment

Faced with uncertainty around potential customer reactions and the customer’s perception of value, companies often put in significant investment and resources into their products in order to launch a “perfect” product. A minimum viable product only focuses on those core features that allow the product to be deployed. The product is typically deployed to a subset of possible customers, such as early adopters that are thought to be more forgiving, more likely to give feedback. It is a careful balancing act between the risk and the investment. SCE’s Playstation VR plan definitely holds up when it comes to this litmus test. Instead of building the entire technical infrastructure from ground up, SONY decided to leverage its PS4 horsepower combined with a VR adapter and made changes to those features of the HMD that promises to bring the most value to its gamers such as the low latency and amazing refresh rates (90Hz). In terms of the experience, SONY ensured that its console was primarily targeted at gamers. Perhaps in later generations one will be able to avail more non gaming VR experiences but for this launch it maintained a singular focus on providing the most value to its best customers, PS4 Gamers.

Test Your Plan before Launch

Right around Thanksgiving of 2013, SONY launched its PS4 in the US market. The intention was to clearly get a product on the shelves right in time for Holiday Shopping. And boy, did SONY learn some lessons during that product launch with the media headlines around “Blue light of death”. It has sold more than a million units in the first 24 hours and then the CNN headlines started rolling in. As much as I want the Playstation VR, I was relieved to hear that SONY was not trying to sell me the VR over this Thanksgiving. By taking time to carefully plan and test the product launch strategy before the actual launch will go a long way to provide the customers with the best experience and I think that SONY is up to something good this time around for the Playstation VR. It just feels good and exciting after all the great reviews from the folks that tried the VR during the SONY Experience event recently, although the opening VR demo on the stage was kind of a debacle as reported by VentureBeat.

Keeping my Fingers crossed!