The decision over which blue laser High Definition technology would win out on HD storage has never been in doubt, it was Blu-ray from day one. Sony, Samsung, Panasonic and Philips have never wavered and neither has Fox or Disney, from a Blu-ray only policy.
After NEC gave up the HD DVD ghost, and most of its DVD manufacturing to Sony, it was only the insistence of Microsoft and Intel in supporting any technology which did not come from Sony that gave any credence whatsoever to Toshiba’s HD DVD. Once 120 or so of the top CE manufacturers in the world deserted the DVD Forum, and joined the Blu-ray camp even that resistance was never gong to be enough. After that Toshiba has been fighting a lonely war, which involved killing the goose that laid the golden eggs, by giving its intellectual property away for nothing to Chinese cheap manufacturers which brought cheap devices to market first.
That was never a tactic that was going to win on its own, and Faultline has said it all along. The decision, a brave one and also perhaps a stupid one, when Sony decided that it could win the games console war, despite having to wait a year to include a Blu-ray player in its PS3, has paid off handsomely for Blu-ray technology. However the false start (one year) this gave to Microsoft, and eventually to Nintendo in the early rounds of the games console wars, is now history and has put paid to the legendary Sony gaming leader Ken Kutaragi, and put Sony slightly on the back foot in gaming.
But the Christmas figures now out show that even there it is making a comeback, while the post holiday decision by Warner Brothers to drop HD DVD as a format, underscores the supremacy of Blu-ray.
The truth is that this was a ‘US versus the rest of the world’ decision. There are silly numbers in favor of Blu-ray outside of the US. Shipment numbers have been cited at various ratios as high as 10 to 1 in favor of Blu-ray content in some parts of the world, but never less than 2 to 1. Japan showed a massive preference for it and European high definition DVD volumes are just getting to the point where they affect global volumes, and that has to have been the telling factor in favor of Blu-ray.
Outside of the US the Xbox is not preferred, and as the PS3 has begun to harness its stronger gaming support, and brought new games to the PS3, its shipments volumes have risen dramatically and that has meant more and more Blu-ray players are out there, and more Blu-ray content was selling.
It might have been a different outcome if Nintendo had produced the kind of machine in the Wii that required a High Definition DVD player, and had backed either format, or if Microsoft had bundled a HD DVD player into the Xbox, but even that would be too little too late now. Microsoft will eventually be faced with the prospect of a climbdown, and the inclusion in its Xbox range of a third party Blu-ray drive.
Warner Brothers cited clear consumer preference for Blu-ray, and it will now move to offering only Blu-ray content, from a position where it offered both.
‘Warner Brothers’ move to exclusively release in the Blu-ray disk format is a strategic decision focused on the long term and the most direct way to give consumers what they want,’ said Meyer. ‘The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers.’
Warner Home Video will offer standard DVD and Blu-ray, but keep offering delayed HD DVD releases until May, when even these will cease.
The truth is that we are not yet at a volume stage for either format, and the SD DVD will continue to be the more important technology for some time to come. Blu-ray DVDs are coming down in price, but remain more expensive than HD DVD machines, and both are significantly more expensive than standard DVD players. But the premium that can be charged for high definition Hollywood content is significant for the coming few years, and it is this premium that can put off the fact that online video, piracy and user generated content are all beginning to eat into DVD revenues.
The idea of the rest of the world deciding that Blu-ray was the right direction to go, and that decision being forced on the US, strikes US players as the tail wagging the dog. Surely, that logic goes, the US picks its technology and thrusts it on the rest of the world, and at one point there was a genuine danger of the US picking HD DVD and the rest of the world picking Blu-ray. Hollywood may even have preferred that idea, so that US region DVDs could then never be played outside the US, but we have managed to escape that outcome.
But if you are Howard Stringer, CEO of Sony, the news comes as a huge step in the long term recovery of Sony, as do the holiday numbers for PS3 and other PlayStation technology.
Microsoft sold 4.3 million Xbox 360 video game consoles in the last three months of 2007, and released its top selling titles for the device including “Halo 3” and “Mass Effect.” But despite these shipment numbers, brought about by late price cuts, it has been forced to give away games to around 8 million people, due to problems that these huge volumes caused its Xbox Live! Network.
Sony chose not to quote for the last quarter, but from the start of the holiday season beginning November 23rd, about half the period and given that the figure was given by Sony Entertainment America, we might assume its figures are just for the US, but it said it sold 1.2 million PS3s, plus 1.4 million PSP handhelds and 1.3 million units of the PlayStation 2, which is 3.9 million devices in half the time. It is likely that PS3s did well over 2 million in the same period, and while that is still below Xbox shipments, there are more moves up Sony’s sleeve and the PS2 is far from dead.
It still looks like Microsoft has scored a major victory with Xbox in the US, but what these numbers show is that the PS3 and the other PlayStation devices are growing in popularity as their prices come inexorably down. PlayStation is NOT going away, and that means Blu-ray is going to keep up the pressure on HD DVD until it is extinguished.
If that was not enough Sony has used CES to introduce a swathe of new products, and its sister company Sony Ericsson, has some sexy new handsets (see story elsewhere in this issue).
The PlayStation Portable (PSP) has already come out in a new slimmed down cheaper version, and this week Sony added Skype to the device. It is already being used as a handset with BT written software on it, using VoIP through a Wi-Fi connection, but now it can reach into the huge Skype community as well.
Over the Christmas period it also leaked out that the older, ‘fat’ PSP can, after all, be used with the Japanese 1 seg mobile TV service in Japan for the purchase of a cheap antenna, but only through an unofficial ‘hack’ that has been published on the web, in all places in Brazil, where the 1 seg ISDB-T mobile TV technology has just been launched. That will spur sales of the mobile TV antenna extension.
Also the incredible picture quality of the 11 inch OLED TV is one technological lead we have talked about a few months ago, but Stringer had Sony showing off its 27 inch big brother at CES, and if that comes to market in the next 6 months, it will mean Sony will lead the flat TV stakes once again by perhaps as much as a year. The 11 inch TV is just 3mm thick can show HD 1080p, can switch up to 1,000 times faster than LCD, and has a contrast ratio of an astonishing 1 million to 1, weighing just 2 kilograms, and has 960 x 450 pixels, uses just 45W of power and is on sale in Japan for $1,743. If the 27 inch comes out this year, it will go straight to the top of the flat TV charts, and demand a considerable premium against LCD.
As if that wasn’t enough Sony has stretched its ‘stranglehold’ on cameras and camcorders by introducing another 16 new models, some with as much as 8 GB of flash memory, but the real star technology is its new wireless proximity transfer system called TransferJet, using radio and near field technology and transferring files at up to 375 Mbps (usable transfer speed). That’s almost as fast as USB and the devices only have to be within 3 cm of each other, using 4.48 GHz unlicensed radio spectrum, and it’s a great way to get around all the wiring that can be needed for file transfers to PCs, and the TransferJet technology will start emerging on devices, but also as attachments for existing devices. It plans to push the technology to handsets, and not only those used by Sony Ericsson.
Sony also showed a new music devices called ‘Rolly,’ which is an egg shaped MP3 player which rolls around in time to the music it’s playing. It may not be the next Walkman, but it shows that Sony is now prepared to try things out, after the stark conservatism that haunted the company in the previous five years.
Also Sony showed a new Mylo, a wi-fi based communicator that is not a handset, but which offers VoIP and entertainment functions, an upgrade to a device launched originally in August 2006.
The new version has a 3.5 inch screen, camera, VoIP, web browsing and AOL instant messaging based on an Intel chip. Basically it’s a PSP without the games, but we need to see pricing before we will wax lyrical about it.
There is a definite feel that after several years in the wilderness, Sony may have re-discovered its inventiveness and it still remains a force in all of its core markets – DVDs, cameras, camcorders, TV technology, music players, games consoles and handsets.