Sony plays games with e-tail initiative: Hopes to avoid "death by demand" fate

Prospective e-tailers better have $7.5 million to spare, because that's the ballpark cost to get it right with in Sony Computer Entertainment's experience.

Fresh from implementing an SAP R/3 back end, Sony is preparing to launch, its next-generation computer entertainment and communication system, using a solution to create an online store.

And Sony wants to get it right, anticipating demands similar to the Japanese response to the launch which saw 600,000 hits against the Playstation Web site within the first two minutes of operation. A total of 980,000 orders were placed in the first week, with about 33 per cent placed online, according to Sony.

"We have to deliver consistently and up to the expectations of the online customer," said Michael Ephraim, managing director of Sony Computer Entertainment Australia.

Ephraim said Sony is confident it will avoid the fate of e-tailers - with one product and no brand name - that failed to meet the demand generated by online consumers last Christmas. He said they were victims of their own popularity - although he agreed "there is no magic in e-tail, it has the same issues as the bricks-and-mortar version".

And Ephraim said SAP was chosen to "deliver a robust, totally integrated solution, which we believe will successfully support's entry into the business-to-consumer retailing space".

Sony anticipates rolling out more features of, such as telesales, on-site ordering, as well as a business-to-business initiative down the track that will "add value to our business", Ephraim said.

Return on investment is a big issue with outlays in the order of $7.5 million and Ephraim expects the system to pay for itself within two years, "three at the outside". He added: "It will depend on how successful online sales of Playstation2 is compared to retail sales."

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