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"Blu-ray Disc" Blues; Lagging Playstation 3 Sales
The "Blu-ray Disc" blues!
A Thursday, May 3rd, 2007 Guardian Unlimited article features an interesting new story about the sad state of "Blu-ray Disc."
The title of the article is "No punches pulled in high definition war" by Kate Bulkley.
Crumbling support
Jerry Jones
A Thursday, May 3rd, 2007 Guardian Unlimited article features an interesting new story about the sad state of "Blu-ray Disc."
The title of the article is "No punches pulled in high definition war" by Kate Bulkley.
The stakes are very high indeed for companies on both sides. Yet Sony, the pre-fight favourite - with the best-selling games console franchise in the world and the backing of seven Hollywood studios (basically all of the big ones except Universal Pictures) making their movies available on Blu-ray - is nowhere near delivering the early knockout blow it wanted.
Instead, early defections from the Blu-ray-only camp and lagging sales of PS3 consoles have blurred the picture of which format will win. Samsung broke ranks with Blu-ray last month by announcing it will make players that play both HD formats, following a similar move by LG. In addition, most analysts acknowledge that the PC manufacturers will play a key role in the format war - and having Microsoft and Intel behind HD DVD is significant.
Meanwhile, PS3 sales in the UK, the European market where PS3 has had its most successful launch, were 165,000 in week one but fell to 28,000 in the second week, a trend that has been echoed in other markets as well. Sony took a big gamble bundling the Blu-ray player with the PS3, a move that contributed both to delays in its release and higher prices for the consoles. Last week Ken Kutaragi, the "father of the PlayStation", paid the price and resigned as chairman and chief executive of the Sony Computer Entertainment unit. With the sales of PS3 lagging, the new machines may not be the cornerstone of a recovery at Sony, with videogame-related losses for Sony's year ending in March expected to amount to $2bn (£1bn) - double original expectations.
On the retail side, the battle is also taking some interesting twists. In a recent blog on Digital Trends, Rob Enderle said that US retail giant Wal-Mart (which owns Asda in the UK) plans to bring in "a massive number of low cost (possibly sub-$200) HD DVD players for Christmas". Although unconfirmed by Wal-Mart, such a move could be decisive. Wal-Mart uses DVD sales as a loss-leader to attract shoppers and accounts for between 40% and 45% of all US DVD sales.
At the moment there are 180 Blu-ray titles available in Europe, coming almost exclusively from big Hollywood studios. But despite the weight of titles, the number of HD DVD discs that are bought against the number of players sold is much higher than for Blu-ray discs. In the UK, this so-called "attach rate" for HD DVD discs is 28 per year on average, while for Blu-ray it's five, says the HD DVD Promotion Group.
While sales of Blu-ray hardware in the US (including PS3s and standalone players) is 5-to-1 against HD DVD hardware sales, Blu-ray's software sales figures are also a lot less impressive, at 2.3 discs per player, according to a recent report. "If PS3 people all started buying HD discs then by sheer weight Blu-ray would walk this battle," says Helen Davis Jayalath, senior video analyst at Screen Digest. "But that's not likely, because they are gamers." And, she adds, the Wal-Mart story "was an overoptimistic leak on the part of one of a number of Chinese companies that Wal-Mart is talking to. [Enderle] seems to believe that if a Wal-Mart cheap player deal goes ahead, HD DVD will 'win'. I'm not sure Sony will give up that easily."
But the Blu-ray hard line has begun to crumble among Hollywood studios, where Warner Bros and Paramount are hedging their bets by making discs in both formats. And it may be significant that Warner will offer its much-anticipated The Complete Matrix Trilogy only on HD DVD later this month.
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