Mtk Caso Sony

9-505-024
REV: MARCH 8, 2007

ANITA ELBERSE YOUNGME MOON

Sony EyeToy
We have a very simple description of what we strive for in developing games—it’s be first or be best. — Phil Harrison, SCEE, February 2004 Friday, February 27, 2004, was a joyous day at Sony Computer Entertainment Europe’s (SCEE) London studio. The night before, one of its games—EyeToy Play—had taken home two prestigiousBritish Academy of Film and Television Arts (BAFTA) awards, including the much sought-after statue for “technical achievement.” Phil Harrison, executive vice president, development for SCEE, who had championed the concept and had led the development and marketing efforts for over three years, had more reasons to be proud. EyeToy Play had been a tremendous commercial success, selling over 2.5million copies in Europe since its launch in July 2003. Prompted by this success, Sony had launched the game in November 2003 in North America, selling half a million copies to date, and in early February 2004 in Japan. While these sales figures were impressive for any game, they were particularly remarkable given the unique nature of the product, which was essentially a bundle of hardware andsoftware. The hardware was a camera, simply referred to as “EyeToy,” that users plugged into a Sony PlayStation 2 console and placed on top of their television. The software, aptly titled “Play,” consisted of a compilation of 12 games on one disk that users inserted into the PlayStation 2. The game concept was simple but groundbreaking; by standing in front of the camera, users could place themselves intothe game (actually seeing their own image displayed on the television) and interact with game objects appearing on the screen by moving their bodies—without using traditional handheld controls (see Exhibit 1 for some impressions). The concept had made a splash among game developers and executives when first introduced at an industry conference and had gone on to generate buzz among consumers.However, Harrison realized that there were significant challenges ahead. Sales for EyeToy Groove, a dancing game that had been the follow-up to EyeToy Play, had been relatively disappointing—only 100,000 units had been sold so far. The EyeToy team now had to demonstrate that there was an ongoing market for EyeToy software and the concept was “not just a fad,” as Harrison put it. This promised to bean uphill battle, in part because the development and marketing budget for new games was rather limited. The London studio had several new software concepts in the pipeline that were being prepared for release later in 2004 and in early 2005. Was the studio moving in the right direction? Or was it time to rethink its development and marketing strategy?________________________________________________________________________________________________________________
Professors Anita Elberse and Youngme Moon prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2004 President and Fellows of Harvard College. To ordercopies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission ofHarvard Business School.

505-024

Sony EyeToy

Company Background
With consolidated annual sales of over $62 billion, Sony was one of the largest entertainment companies in the world and a leading manufacturer of a wide variety of audio, video, communications, and information technology products. Sony was split up into several divisions, including Electronics, Computer Entertainment,...