Great article at Forbes on how the Paramount move last August stirred Sony to action.

http://www.forbes.com/technology/forbes/2008/0811/096.html

I like reading some of the parts about how Sony "encouraged" their relationship with Lionsgate by cofinancing a movie, etc. Impressive how they were able to turn on a dime in four months to emerge as the defacto HDM format.

I like reading some of the parts about how Sony "encouraged" their relationship with Lionsgate by cofinancing a movie, etc. Impressive how they were able to turn on a dime in four months to emerge as the defacto HDM format.


True, I think in the end it shows that Sony has the right pieces for running a successful business model, but it took the threat of failure that finally stirred them to action instead of talking a good game.

Sony was a sleeping giant that needed to be stirred to action.

It is interesting in roughly six months after the Paramount announcement that Toshiba closed shop.

The interesting thing will be to see if turns out to be a 'true win' or whether they won a battle only to lose a longer-term war. It is hard to imagine the disk media market not shrinking over time as other options become more readily available.

(And I'm not really a 'rah rah' downloads person, since I live in a part of the country where downloads will never be a viable option. It just seems to be the way the world is going.:))

The interesting thing will be to see if turns out to be a 'true win' or whether they won a battle only to lose a longer-term war. It is hard to imagine the disk media market not shrinking over time as other options become more readily available.

(And I'm not really a 'rah rah' downloads person, since I live in a part of the country where downloads will never be a viable option. It just seems to be the way the world is going.:))

Downloads will be an option but I have a feeling downloads will be as successful as PPV or OnDemand. Core users but not enough to topple the other options available. For all the iTunes and other music downloads out there I can still go to my local retailer and buy a CD. Physical media is still here and will be for sometime. Too many questions remain regarding DRM and fair use for me to totally abandon physical media.

Even Sony has added download options to the PSN, but I don't plan on using it. BB Total Access is still a cheaper option for me, plus BD quality easily surpasses it on my 92-inch screen.

I like reading some of the parts about how Sony "encouraged" their relationship with Lionsgate by cofinancing a movie, etc.For anyone interested this is what the article said:

It fell to Wiesenthal, Stringer's U.S. finance man, to lobby one studio, Lionsgate, to make sure it didn't agree to payments from Toshiba (which doesn't own a studio). "The relationship between Sony and Lionsgate was going to continue a lot longer than the relationship between Toshiba and Lionsgate," he argued, making cell phone calls from a boat while on vacation off Long Island, N.Y. "Toshiba was not going to cofinance one of their movies."


Impressive how they were able to turn on a dime in four months to emerge as the defacto HDM format.Agreed, it was impressive that Blu-ray could win the format war so soon after that and for the last few months of 2007 I thought the format war would drag into 2009. From the sounds of the article Howard Stringer did a good job of responding to the Paramount/Dreamworks deal and the Thanksgiving sale of $99 HD-A2 players.


The interesting thing will be to see if turns out to be a 'true win' or whether they won a battle only to lose a longer-term war. It is hard to imagine the disk media market not shrinking over time as other options become more readily available.Well as long as Sony makes a good profit from Blu-ray I think it would be a "true win" regardless of what might happen. Though much like the paperless office I think that it may take a very long time for video downloads to replace physical media.

The interesting thing will be to see if turns out to be a 'true win' or whether they won a battle only to lose a longer-term war. It is hard to imagine the disk media market not shrinking over time as other options become more readily available.

(And I'm not really a 'rah rah' downloads person, since I live in a part of the country where downloads will never be a viable option. It just seems to be the way the world is going.:))

http://www.thestandard.com/news/2008/07/01/sony-s-blu-ray-will-keep-them-winning-new-format-war


Home-theater buffs will gasp in horror, deride me and mock my lack of taste for what I am about to say. But the evidence is hard to deny: Sony is finally starting to realize that compressed, downloadable movies -- as opposed to physical media like high-definition Blu-ray discs -- are the way of the future.

This may come as a surprise to HD fanatics and observers who have watched the entertainment giant spend billions promoting the Blu-ray format. The push included a $3.3 billion dollar investment in the Playstation 3 game console, which supports Blu-ray discs. Now as more consumers watch movies online, Sony is hedging its bets on Blu-ray, by introducing two new ways to stream movies directly to the home. The first method comes with the new Playstation 3 firmware and allows PS3 owners to order from a direct-download movie store. The second method uses a device called the Bravia Internet which connects to Sony's Bravia TV line.

These new add-on technologies seem like attempts to wage a two-front war against competitors in both the physical media and streaming arenas, instead of focusing all of its considerable resources on the right format for the future. Even though Blu-ray trounced Toshiba's rival HD-DVD format, Sony seems to have realized that it merely won a small battle in the wrong war. Now Sony is skirmishing on the new front, streaming media. Its most recent volley came with the announcement that Bravia Internet owners will be able to download Will Smith's new movie, Hancock, before the DVD release.

So why is Sony now hedging its bet on the expensive "Blu" format, that was supposed to make the PS3 console the machine of the future? The company assumed that HD alone would be a big enough draw for Blu-ray, but interest simply hasn't materialized. Right now, only 25% of American households own an HDTV, and just a fraction of those users actually view any HD media. As for the other Blu-ray features -- HD-DTS, Master Soundtracks, multi-streams -- I doubt any of them are must-have features for the average consumer. I'd even wager that most HDTV owners will barely notice the difference between 1080p resolution Blu-ray and 720p streaming media. These touted Blu-ray features end up being largely irrelevant to anyone not owning a $20,000 home theater.

On top of that, the media industry is predicting that by current projections, Blu-ray sales won't overtake DVD until 2012 and that's more than enough time for Netflix, AppleTV, Tivo, or Hulu to multiply the number of streaming HD customers who no longer need physical media. These users will enjoy a virtual library many times larger than most individuals could own, accessible at any time. The very idea of owning a movie could fade away in lieu of subscription models or simply the cheap price of renting.

If Sony's hedge is successful, what will happen with Sony's hardware investments in Blu-ray and the PS3? Right now, Sony has an expensive, money-losing, Blu-ray box in the PS3, that can't seem to decide if it's made for watching movies, playing games, or streaming media. It's classic Sony behavior, releasing devices and proprietary technologies which don't focus on the features that average consumers crave. It happened when Sony's miniscule RAM-based MP3 players were largely ignored for Apple's hard disk-based iPods. Storage space -- not physical size -- ended up being the feature music junkies desired. It's happening again with the Playstation 3, and Sony's last-second repurposing of the expensive device to download movies isn't a good fit when other streaming devices are much cheaper.

Sony's other innovation, the Bravia Internet box, only works Sony's Bravia televisions, as an expensive add-on to an already premium priced TV. This walled-garden strategy with the Bravia isn't likely to gain significant market penetration, much less win the format war. For that to happen, half-hearted attacks won't be enough. Sony will need to fully engage on the streaming front, if it intends to win against the likes of Netflix/Roku, Hulu, and Apple.

jmacvols,

while digital distribution has growth potential, there are still many questions to be answered.

Fair use? DRM? Storage? In-home networking/streaming? Proprietary boxes (AppleTV vs. Roku/Netflix vs. Tivo Unbox)? True ownership (if my system crashes do I have to pay again)? Services shutting down (does my content still work)?

Not to mention that many US homes still don't have broadband and those that do still have relatively slow connection for HD streaming. Heck, some providers are still claiming 768k DSL is highspeed. How do you think streaming downloads work over that connection? Service providers are not going to give bandwidth away for free especially when they have their own services that are directly competing with the other download services. Do you think Comcast would rather have that $5 fee over Apple? Service providers especially those that own the pipes are going to make it harder for third party providers unless there is a revenue sharing plan.

Sure we hear about some areas getting 50Mbps service, but how much are people paying? Comcast wants $150 in the Twin Cities. BD looks like a much cheaper option especially when you factor in the hidden costs associated with downloading.

I am not arguing against downloads, but I doubt they are going to take off as fast as some of these 'futurists' claim.

Now let's get back to topic. If Blu-ray was doing that badly then I highly doubt retailers would be expanding BD racks at their stores. Hat's off to Sony for finally putting the pieces together.

That Forbes article is a joke. They a talk about things like how Sony made a big descision to package SM3 with the PS3 to promote it as a Blu player, yet forget that the original PS3s came with Talladega Nights, and they gave away tons of CR movies too.
They talk about deals they made after the Paramount deal, but neglect the Target one and others that Sony did before.


Its funny that they mention the Playstation business was a mess...at a time when the PS2 was dominating console sales. It just shows how much of a drain the PS3 was.

If one looks at how Sony is doing overall, the overall value of Sony is around the same as Dell - at around $40B. However, that is dwarfed by Apple which is at $140B. When I think of crisis and success, I think about Apple back in 1997!

I believe the whole netwoked centric view of Stringer is taking a page out of the Apple playbook. Winning Blu Ray was about saving the business (loss of stature), not necessarily about being the engine of growth. Almost no one analyst I know of that follows Sony believes that Blu Ray will be Sony's engine of growth. The reason I believe is the current financial arrangement in place (not talking about past pay offs etc).

The PS3 is the sleeping giant...

The PS3 is the sleeping giant...

The console industry is where it is at. Blu-ray is currently 1/30th of DVD, and game SW is greater than DVD.

If Sony wants to make money they need to focus on games (ps2 and PS3) for the next few years...and hope the next xbox or wii-HD don't come out too soon.

If one looks at how Sony is doing overall, the overall value of Sony is around the same as Dell - at around $40B. However, that is dwarfed by Apple which is at $140B. When I think of crisis and success, I think about Apple back in 1997!

I believe the whole netwoked centric view of Stringer is taking a page out of the Apple playbook. Winning Blu Ray was about saving the business (loss of stature), not necessarily about being the engine of growth. Almost no one analyst I know of that follows Sony believes that Blu Ray will be Sony's engine of growth. The reason I believe is the current financial arrangement in place (not talking about past pay offs etc).

The PS3 is the sleeping giant...


I don't think anyone is saying that BD is the make or break Sony product. The articles point was that Sony is diversified into businesses that work together for a common end goal. In the article's case it was which format was going to emerge as victor. I don't remember reading that Blu-ray was going to make or break Sony. I think Stringer did not want the Blu-ray being labeled Betamax 2.0 under his leadership. Anyone who remembers that war knows Beta was technically superior but it still lost to a product licensed to many manufacturers.

Hmmm, maybe Sony learned from that and Toshiba did not. Don't go it alone.

The console industry is where it is at. Blu-ray is currently 1/30th of DVD, and game SW is greater than DVD.

If Sony wants to make money they need to focus on games (ps2 and PS3) for the next few years...and hope the next xbox or wii-HD don't come out too soon.


And if those units are going to compete with the PS3, they need a next-gen drive and similar processing capability or better. Do think they can cost less than the PS3?

Again the HD DVD brigade is overlooking the point of the article on how Sony used its multiple divisions and its business relationships to get BD over the top.

The PS3 is Sonys most well differentiated product in my opinion.

I just don't see Microsft being a factor for very long. I mean, they were wiling to pay $40B for Yahoo! With that money they could have bought ALL of Sony or Dell! Tells me Microsoft is focused on the software side with little interest in hardware.

That Forbes article is a joke. They a talk about things like how Sony made a big descision to package SM3 with the PS3 to promote it as a Blu player, yet forget that the original PS3s came with Talladega Nights, and they gave away tons of CR movies too.
They talk about deals they made after the Paramount deal, but neglect the Target one and others that Sony did before.


Its funny that they mention the Playstation business was a mess...at a time when the PS2 was dominating console sales. It just shows how much of a drain the PS3 was.

Last holiday though the war was heating up and Toshiba was attempting a full frontal assualt with the so-called $99 one day special, the Paramount payoff while attempting to also payoff Warner and Lionsgate.

Quite different from the initial pack-in title. Whatever your opinion of SM3 was, it still was a huge hit last summer. With the rebate going on you got a next gen system with a pack-in and 5 other movies for $400. Pretty good deal IMHO.

The PS3 is Sonys most well differentiated product in my opinion.

I just don't see Microsft being a factor for very long. I mean, they were wiling to pay $40B for Yahoo! With that money they could have bought ALL of Sony or Dell! Tells me Microsoft is focused on the software side with little interest in hardware.


Ask Microsoft about HW design... they outsource. Look at the huge RROD issue they had and they continue to have.

The PS3 has been reliable overall and a failure rate that is more typical with other CE products. How long do you think most CE companies could survive if they released a major product with a 30% failure rate in 18 months? The only reason they stood behind them is because the class action lawsuit would have been huge.

Again Sony has a long history of building reliable hardware. I have had bad Sony units before, but I still have more faith in HW with a Sony nameplate than MS.

Hmmm, maybe Sony learned from that and Toshiba did not. Don't go it alone.

In the end, it largely came down to a single studio's decision - Warner. Last I checked, by the end of of 2007 HD DVD was still selling around 50% of stand alone players and around 40% of disk sales. So without Warner's decision Sony could not have ended the format war. It is always part strategy, part execution and part luck :)

In the end, it largely came down to a single studio's decision - Warner. Last I checked, by the end of of 2007 HD DVD was still selling around 50% of stand alone players and around 40% of disk sales. So without Warner's decision Sony could not have ended the format war. It is always part strategy, part execution and part luck :)


Agreed. And I am certain that Toshiba was starting to feel the pinch of artificially low priced HD DVD players. If they would have seen a significant uptick in software sales they maybe could have justified continuing, but most HD consumers picked one side and stayed there.

I have to admit I was tempted at times even before I bought a PS3 to pick up a HD DVD unit, but in the end I just could not justify that to get titles from one then two exclusive studios. I bet on BD due to the PS3 and was committed to sticking with my choice. But if HD DVD won I probably would have moved over to that.

Ask Microsoft about HW design... they outsource. Look at the huge RROD issue they had and they continue to have.

The PS3 has been reliable overall and a failure rate that is more typical with other CE products. How long do you think most CE companies could survive if they released a major product with a 30% failure rate in 18 months?

They are also increasingly outsourcing their SW design to India and elsewhere :eek:

I thought it was all about DRM and how BR had a stronger version of 'control'. hmmmmmmmmmmmmm............

Last holiday though the war was heating up and Toshiba was attempting a full frontal assualt with the so-called $99 one day special, the Paramount payoff while attempting to also payoff Warner and Lionsgate.

Quite different from the initial pack-in title. Whatever your opinion of SM3 was, it still was a huge hit last summer. With the rebate going on you got a next gen system with a pack-in and 5 other movies for $400. Pretty good deal IMHO.


You missed my point. That article makes it sound like only after the Paramount deal did Sony wake up and start to really push things like store tie-ins and the PS3/Blu-ray relationship, which is pure hooey. They were pushing Blu and spending hundreds of millions and giving away 5 disks with every PS3 from day one, and yes so was Toshiba.

I think the real point is Sony had a lot more to lose than Toshiba, and so was willing to fight harder. It seemed like for a long time Toshiba did very little and did not have their heart in it as much as Sony or Panasonic for that matter. I think they just thought that lower production costs would win it for them.

Robyn Meredith 08.11.08, 12:00 AM ET

What date is that?

Is that August 11, 2008?

I don't think the whole Blu Ray thing will be worth it for Sony in the end. They are pretty much locked in 3rd place now in the gaming console race.

Too many delays, too high a cost, etc. They have attempted to correct this recently, but it's too late.

Squaresoft bringing the Final Fantasy series (starting with FF XIII) to the Xbox360 says it all. Not enough of a PS3 install base for developers of major titles to stay PS3 exclusive anymore.

It wasn't worth it IMO, because Blu Ray is never going to pan out like they had hoped. On Demand rentals will eat up their market.

BD is the new LD, not an insult as I owned an LD player for many years and had a few hundred in my own collection at one time. But it will offer a quality advantage over direct digital that only few will appreciate or even notice. Heck, even some who notice the difference may not care when factoring in the element of convenience.

It seemed like for a long time Toshiba did very little and did not have their heart in it as much as Sony or Panasonic for that matter. I think they just thought that lower production costs would win it for them.Toshiba did a bit more than that and the HD-A1 was estimated by iSuppli to cost $674 for just the bill of materials (http://www.isuppli.com/marketwatch/default.asp?id=348) which means Toshiba likely lost over $200 per HD-A1 player. Personally I don't think that Toshiba ever stopped subsidizing their stand alone HD DVD players. Note that there was nothing wrong with that but I think it explains a few things such as why so many CE companies supported Blu-ray or why we never saw any non-Toshiba designed/supported stand alone HD DVD players for under $800 MSRP during the format war.

I don't think the whole Blu Ray thing will be worth it for Sony in the end. They are pretty much locked in 3rd place now in the gaming console race.

Too many delays, too high a cost, etc. They have attempted to correct this recently, but it's too late. Huh? A lot of the bigger analysts have predicted the PS3 to pass the 360 by the end of 2009, and the PS brand as a whole is still wildly successful.
Squaresoft bringing the Final Fantasy series (starting with FF XIII) to the Xbox360 says it all. Not enough of a PS3 install base for developers of major titles to stay PS3 exclusive anymore.Well, that would be true if it was only one way, but it's not. After all, one of the biggest 360 exclusives from last year (Bioshock) is no longer exclusive. In fact, most of the big game companies see an industry-wide move away from 3rd-party exclusivity.
It wasn't worth it IMO, because Blu Ray is never going to pan out like they had hoped. On Demand rentals will eat up their market. Which ones? The market is still smaller than Blu-ray, despite having more titles and a longer time in market.
BD is the new LD, not an insult as I owned an LD player for many years and had a few hundred in my own collection at one time. But it will offer a quality advantage over direct digital that only few will appreciate or even notice. Heck, even some who notice the difference may not care when factoring in the element of convenience.Sales wise, BD passed LD's ~20-year sales mark last year, and it's continuing to grow. And as mentioned above, the DD market has been around longer but is growing slower. When the entirety of the DD market (including both SD and HD) is selling less in a year than one HD format (Blu-ray) does in 6 months, you'd be hard-pressed to explain exactly how that means DD is taking over anytime soon.

Sony's involvement in BD is more than CE products. It is being introduced in their Professional lines as well.

Everyone always says that Sony lost the Betamax/VHS war.

Guess every cloud does have a silver lining.

They literally took over the Professional Broadcast Video market with Beta

For the PS3 to pass the xbox in sales is not a big achievement at all. If you compare how the PS2 did v the original xbox, that Microsoft can even sell 1/2 as many players as Sony is a huge victory. Imagine Maf increasing their market share to 20 percent of the PC market.

Very few analysts have a real pulse of the market. Most rely ln information that can be found on the internet and simply go from there. IF you want to know how Sony plans to grow their business listen to what their CEO says. Simple as that! Blu Ray for now is not what Sony is saying will drive either revenue or profits for them - especially profits.

That the format war was costly for Sony is an under statement. They have sufered huge loss of margin in key business divisions because of Blu Ray and with no upside in the near future - IF there was, you'd bet Howard Stringer would make it a central part of his message to investors and analysts. He did not and continues to not do so, beyond saying they won the war.

Every analyst I've heard projects PS3 will outsell 360 by then end of their lifecycles, so I don't see how Blu ray was that much of a hindrance.

Sony did a good job winning the format war. They'll make back their investment and then some.

Agreed. And I am certain that Toshiba was starting to feel the pinch of artificially low priced HD DVD players. If they would have seen a significant uptick in software sales they maybe could have justified continuing, but most HD consumers picked one side and stayed there.

I have to admit I was tempted at times even before I bought a PS3 to pick up a HD DVD unit, but in the end I just could not justify that to get titles from one then two exclusive studios. I bet on BD due to the PS3 and was committed to sticking with my choice. But if HD DVD won I probably would have moved over to that.


I do not think Toshiba was in a pinch for money. Why is it that everyone think Toshiba was going to go broke with HD-DVD. They make other things that are more profitable

http://www3.toshiba.co.jp/power/english/thermal/index.htm
http://www3.toshiba.co.jp/power/english/hydro/index.htm
http://www.toshiba.co.jp/nuclearenergy/english/experiences/capacity/npgcij.htm
http://www.toshiba.ca/web/group.grp?lg=en&section=4

I do not see Sony in some of these fields. (Energy generating makes more money than Movies and Music worldwide, and let not talk about Health Care industry)

That the format war was costly for Sony is an under statement. They have sufered huge loss of margin in key business divisions because of Blu Ray and with no upside in the near futureNope. Not even close.

The only business division that's suffered any serious losses is the gaming division, and since the same thing happened with the PS2 (which ended up being the highest-selling system), I doubt very much you can say with any certainty that there's "no upside in the near future". As for the other business divisions, the ones directly responsible for helping put Blu-ray on the market (namely, consumer electronics) are not only not suffering losses, but are also the divisions that are the most profitable for Sony. Last time I checked, they more then erased the gaming division's losses.

Common sense would indicate that if winning the format war equated to a pot of money, the stock price and market value of Sony would have shot up AND their CEO would not need to have an analysts briefing explaining how the company will drive profitability via networked devices and online content.

The format war effected many units of Sony although unlike the PS unit they not show losses. The standalone Players were being shipped for free with Bravia TVs, movies were being packed for free and Sony agreed to jointly market and finance competitors products. These all impact margin for the company.

Sony is not even close to dominating with the PS3 like they did with PS2.

Common sense would indicate that if winning the format war equated to a pot of money, the stock price and market value of Sony would have shot up AND their CEO would not need to have an analysts briefing explaining how the company will drive profitability via networked devices and online content.Long term royalties is obviously not a "pot of money" but that doesn't mean that Blu-ray royalties won't end up being a golden goose for Sony. Also with a company as big as Sony they are going to rely on many different products for revenue so I don't think it is surprising that Howard Stringer would talk about other products and potential revenue sources. Also just curious but could you post a link to this Sony briefing?


The format war effected many units of Sony although unlike the PS unit they not show losses. The standalone Players were being shipped for free with Bravia TVs, movies were being packed for free and Sony agreed to jointly market and finance competitors products. These all impact margin for the company.Though without knowing the accounting details of Sony none of us know how much Blu-ray affected the margins for Sony. I have seen some posters who are a tad bitter about how the format war turned out post big speculative numbers but without evidence it is only speculation.

Sony is not even close to dominating with the PS3 like they did with PS2.

In the US the PS3 has about 18% of the HW market and a whole lot less of the SW market. The PS3 has the worst attach rate of the 3 consoles, I am guessing because they push it as a Blu-ray player.

When you look at the game console market vs. the HDM market, the game market is about 30 times larger right now. Sony gave most of it up to win the tiny one (tiny for now...who knows if it will grow to equal DVD - which is still less than games).

The current stock price factors in the present value of all expected future royalty streams. The stock price or company valuation is forward looking not backward.

But all said and done, the format war victory was tremendous execution and showed how one could leverage a powerful brand to achieve an important objective. The problem with Toshiba was that it was a minor brand in the US and had little vertical clout. Warner, their biggest backer, was in the midst (if my info is right) of a corporate power struggle where their champions (and those who favored the DVD Forum) lost at the corproate level (I believe it started with the leaving of Liberfarb and ended with the arrival of Bewekes and the end of the format war). Luck is very important in business :)

The current stock price factors in the present value of all expected future royalty streams. The stock price or company valuation is forward looking not backward.

But all said and done, the format war victory was tremendous execution and showed how one could leverage a powerful brand to achieve an important objective. The problem with Toshiba was that it was a minor brand in the US and had little vertical clout. Warner, their biggest backer, was in the midst (if my info is right) of a corporate power struggle where their champions (and those who favored the DVD Forum) lost at the corproate level (I believe it started with the leaving of Liberfarb and ended with the arrival of Bewekes and the end of the format war). Luck is very important in business :)

I find that over long intervals (such as 20 years), there is a very close correlation between stock price growth and earnings growth. In fact for indices such as the S&P500 it is amazingly within 1%. However over the short term, unless you have inside knowledge, I find it is best to treat the stock and the underlying company as 2 separate entities, and for the purpose of investing, to ignore the underlying fundamentals altogether. There are over 50 factors that move a stock (in my model), and the fundamentals is only one of them, and it is becoming increasingly less influential. As you said the stock tends to be a leading indicator to the fundamentals, but that fact is useful only to the extent that it lets you explain after the fact why the stock moved, so it only has curiorisity & educational values.

Common sense would indicate that if winning the format war equated to a pot of money, the stock price and market value of Sony would have shot up AND their CEO would not need to have an analysts briefing explaining how the company will drive profitability via networked devices and online content.

The format war effected many units of Sony although unlike the PS unit they not show losses. The standalone Players were being shipped for free with Bravia TVs, movies were being packed for free and Sony agreed to jointly market and finance competitors products. These all impact margin for the company.

Sony is not even close to dominating with the PS3 like they did with PS2.

Even prior to the current economy, the stock market was no bargain really and companies like Sony even if they did well would not show huge stock gains, again based on recent and current stock markets.

More importantly even the "Average joe" with some common sense knows that the stock market is a glorified pyramid scheme even when long term, scholarly investors say stock prices are based on earnings, etc.

More importantly even the "Average joe" with some common sense knows that the stock market is a glorified pyramid scheme even when long term, scholarly investors say stock prices are based on earnings, etc.

It is not a pyramid scehem. Stock investing is not a zero sum game - if I make a dollar, it doesn't necessarily mean that someone has lost a dollar. That is the major difference between the stock market and the futures market. Most "Average joe" based their decisions on intuition, which explain their awful returns (usually negative).

Whether we like this market or not, the cost of not participating is too high. You just need to do it in a disciplined and properly-researched manner.

BTW, I never buy a stock because it is a bargain. It may become more of a bargain later. IMO that is the fault of value investing - you are giving up time premium in the hope that eventually the price will recover.

It is not a pyramid scehem. Stock investing is not a zero sum game - if I make a dollar, it doesn't necessarily mean that someone has lost a dollar. That is the major difference between the stock market and the futures market. Most "Average joe" based their decisions on intuition, which explain their awful returns (usually negative).

Whether we like this market or not, the cost of not participating is too high. You just need to do it in a disciplined and properly-researched manner.

BTW, I never buy a stock because it is a bargain. It may become more of a bargain later. IMO that is the fault of value investing - you are giving up time premium in the hope that eventually the price will recover.

way off topic, but yes it absolutely is a pyramid scheme, just a more glamorous one and most of the time legal one. If no one bought in there wouldn't be any money to take out.

And like the current economy we are all paying for the boom times. Now with the correction, some have to worry or think if they can even afford another car, while the rich have to "worry" about buying a second Porsche. While our standard of living went "up" over the last 20+ years it is only a sign of those who have much more standard of living gone up dramatically.

I sent a PM about an interesting philosophy.

(tiny for now...who knows if it will grow to equal DVD - which is still less than games).

Post some numbers. When I looked last year, console game sales are much less than DVD.

Huh? A lot of the bigger analysts have predicted the PS3 to pass the 360 by the end of 2009, and the PS brand as a whole is still wildly successful.
Well, that would be true if it was only one way, but it's not. After all, one of the biggest 360 exclusives from last year (Bioshock) is no longer exclusive. In fact, most of the big game companies see an industry-wide move away from 3rd-party exclusivity.
Which ones? The market is still smaller than Blu-ray, despite having more titles and a longer time in market.
Sales wise, BD passed LD's ~20-year sales mark last year, and it's continuing to grow. And as mentioned above, the DD market has been around longer but is growing slower. When the entirety of the DD market (including both SD and HD) is selling less in a year than one HD format (Blu-ray) does in 6 months, you'd be hard-pressed to explain exactly how that means DD is taking over anytime soon.

What analysts are they, farming analysts asked to pick 1 of 3 upside cards with Xbox360, Wii or PS3 written on the cards' faces? Lol! Microsoft would have to pretty much stop selling Xbox360s tomorrow for the PS3 to overtake it by the end of 2009. A couple of months ago when the PS3 was outselling the Xbox360 (weekly, not overall) by a certain amount it was worked out that it would take something like 6 years for the PS3 to even catch up to the Xbox360 if the PS3 maintained that sales lead every week for the next 6 years. And even if that actually happened the next Xbox would be out by then (with maybe even the 4th one not too far off) so it would be pretty much irrelevant. (I can't calculate it again using current worldwide weekly sales as the Xbox360 is back to outselling the PS3. :D) And I'm pretty sure Bioshock wasn't originally an Xbox360 exclusive and only became one nearer the release date whereas Final Fantasy has been a Playstation exclusive (apart from some spin-offs on Nintendo consoles the last few years and the MMORPG Final Fantasy 11) since Final Fantasy 7 when Sony got the exclusive rights from Nintendo. It's also interesting to note that FF7 seemed to be the turning point for the PS1 which up until that point was getting its ass kicked (and rightfully so) by Sega's Saturn!

As for that iSuppli report someone posted about HD-A1 costing about $200 more to make than they sold it for, well that report is from 2006 and just a couple of months before the best selling Blu-Ray player, the PS3, came out. And the PS3 cost $300 more to make than it was first sold for so to complain about HD DVD players being subsidised is totally hypocritical, especially if you actually own a PS3.

In the US the PS3 has about 18% of the HW market and a whole lot less of the SW market. The PS3 has the worst attach rate of the 3 consoles, I am guessing because they push it as a Blu-ray player.

When you look at the game console market vs. the HDM market, the game market is about 30 times larger right now. Sony gave most of it up to win the tiny one (tiny for now...who knows if it will grow to equal DVD - which is still less than games).

Link please?

Post some numbers. When I looked last year, console game sales are much less than DVD.In 2007 for the United States (http://www.gamespot.com/pages/news/show_blog_entry.php?topic_id=26464499&part=rss&tag=gs_news&subj=6193240) it was $16 billion for game software sales and $15.9 billion for DVD software sales. I haven't heard anything about worldwide numbers for 2007.


Microsoft would have to pretty much stop selling Xbox360s tomorrow for the PS3 to overtake it by the end of 2009.Technically all the PS3 needs to do is have sufficient growth to outsell the Xbox 360 in total worldwide sales within 16 months. That is possible though only time will tell whether that will happen.


As for that iSuppli report someone posted about HD-A1 costing about $200 more to make than they sold it for, well that report is from 2006 and just a couple of months before the best selling Blu-Ray player, the PS3, came out. And the PS3 cost $300 more to make than it was first sold for so to complain about HD DVD players being subsidised is totally hypocritical, especially if you actually own a PS3.Corellianrogue, what I said in that post (http://www.avsforum.com/avs-vb/showpost.php?p=14371629&postcount=24) was that there was nothing wrong with it so what is up with the accusation?

Corellianrogue, what I said in that post (http://www.avsforum.com/avs-vb/showpost.php?p=14371629&postcount=24) was that there was nothing wrong with it so what is up with the accusation?

Toshiba could not do more than subsidize players and pay off studios - both of which they did to the max. Sony likewise used their vertical integration to their max advantage. Given their footprint in the US market, Sony had the ability to spend more effectively. Toshiba's real clout was with the home video divisons of the various studios (excluding Sony, Disney, Fox). However, that was a problem since home video divisions report up to corporate and therin is where they lost the fight. They expected (in my opinion) that the studios would be greateful to them for the success of DVD and have loyalty to the DVD Forum. But at Warner, it ended up being the 'essential' liability.

My respect for Howard Stringer certainly went up once I saw how he conducted the format war - something he inheirited and had said time and again he would not have been a part of, and now his new focus on transforming Sony products to be differentiated and increase margin. The focus is tremendous.

Toshiba could not do more than subsidize players and pay off studios - both of which they did to the max.

:confused: If they were subsidising to the max then they would have paid Microsoft to put HD DVD drives in the Xbox360 Elite. And if they were paying off studios to the max then all the studios would have been HD DVD exclusive except for Sony, lol!

Post some numbers. When I looked last year, console game sales are much less than DVD.

Where did you look?
According to the NPD Group's year-end figures, the US retail gaming industry took in $18.85 billion during 2007. That's nearly twice the Motion Picture Association of America and Nielsen EDI's record-setting US box office take of $9.6 billion for the year. The gaming industry even surpassed DVD sales in 2007, reported to be $16 billion by the Digital Entertainment Group and $15.9 billion by Adams Media Research.


Also, gaming is growing much faster than either box-office or DVD/media sales so this will be the norm.

The only business division that's suffered any serious losses is the gaming division, and since the same thing happened with the PS2 (which ended up being the highest-selling system).

Wow is that mis-leading. After 2 years of the the PS2, it har a marketshare of well over 60% and the gamecube was considered a massive failure because it had less than 20%.

Right now the PS3 has about an 18% marketshare for HW and far less for SW, and yet Sony fans keep saying it will end up like the PS2...when it is tracking gamecube sales.

In 3 years, the Wii will still rule the cheaper consoles (and over all), and the new Xbox will be out continuing high-end sales dominance. The PS4 won't be out for another after that.

Wow is that mis-leading. After 2 years of the the PS2, it har a marketshare of well over 60% and the gamecube was considered a massive failure because it had less than 20%.

Right now the PS3 has about an 18% marketshare for HW and far less for SW, and yet Sony fans keep saying it will end up like the PS2...when it is tracking gamecube sales.

In 3 years, the Wii will still rule the cheaper consoles (and over all), and the new Xbox will be out continuing high-end sales dominance. The PS4 won't be out for another after that.

What you mention makes a good argument against what you are saying. The PS2 while having some competition in the past had little or none compared to what the PS3 has now. Taking into account the Wii and 360 the PS3 is actually doing very well in the current market.

And do you have any proof or links to support your third paragraph or is that just your opinion?

What you mention makes a good argument against what you are saying. The PS2 while having some competition in the past had little or none compared to what the PS3 has now. Taking into account the Wii and 360 the PS3 is actually doing very well in the current market.

That is the silliest thing I have every heard. The PS3 is doing better because it is losing to the competition, while the poor PS2 had it easy because it crushed even more competiton in the Gamecube, Dreamcast, and Xbox????

Sorry, but it should have been the other way around. The PS3 was the successor to the PS2 which dominated the market and only had 2 consoles to battle (wii and 360), but it was delayed by Blu-ray, lost most of exclusives, and scared people away with its high price. The PS franchise lost its majority marketshare and is now a distant third. Not a single person would have guessed that 2 years ago.


And do you have any proof or links to support your third paragraph or is that just your opinion?
Please just do a search. There are lots of other articles besides the one I quoted. You will find one in about 10 seconds on google.

That is the silliest thing I have every heard. The PS3 is doing better because it is losing to the competition, while the poor PS2 had it easy because it crushed even more competiton in the Gamecube, Dreamcast, and Xbox????

Sorry, but it should have been the other way around. The PS3 was the successor to the PS2 which dominated the market and only had 2 consoles to battle (wii and 360), but it was delayed by Blu-ray, lost most of exclusives, and scared people away with its high price. The PS franchise lost its majority marketshare and is now a distant third. Not a single person would have guessed that 2 years ago.


Please just do a search. There are lots of other articles besides the one I quoted. You will find one in about 10 seconds on google.

I never said the PS3 is doing better because it is losing to the competition. I did say it isn't doing as bad as you and others claim taking into account how well the Wii and 360 are selling.

Let's bust another myth. The PS3 did not lose most of its exclusives simply because of coming out late, being to expensive or some other bogus reason. It lost exclusives because the software companies wanted to make more money and diversify sales into other consoles that are selling well which is way more than any other reason.


In Nov., we will be coming up on 2 years of the PS3 being out. Look at the actual numbers of sales over the last 6 months in particular and you will see the PS3 is closing the gap rather quickly on the 360. I know, it is because of the BD player in it. Although minimal there is a reverse effect. There are those that bought the PS3 for BD only and are not gamers, but they have tried demos and are now gaming. Not many had seen that coming. The end of 09 lets see how well overall sales, US and worldwide do for the PS3 both hardware and software.

Another misconception is that when one generation of a product does so well, next or other generations of said product should do as well if not better. With market dynamics the way they are especially in the video game market, saying the PS3 should have done what the PS2 did is not realistic. Past performance does not indicate future trends and the 360 coming off the xbox original is proof of that.

Beyond a doubt I know why I come into these threads and post as I do. I really like the PS3 for all it can do. Fanboy or call it what you will my reasons are positive and obvious. It really is a great machine and overall if one uses it for all it can do it is better and more capable than not only gaming consoles, but it is far better and more capable than any stand alone player and one of the best if not the best CE products in years.

I am guessing you own a PS3. I have related in many threads why I like it as much as I do. After you have stated the "facts" about how it is doing and going to do and telling us all the negatives, after that what really is your point for reiterating over and over the same negative mantra about the PS3? If I didn't like something or stated its' negatives, I would do so and move onto something else. If I am wrong about how you feel and think about the PS3 I apologize in advance. It just seems over and over there are still some who rejoice in the reminders of how bad something is or how poor it is selling, so I then wonder about motivations. Again, when someone enjoys something and talks it up I see it as more justified in terms of motivations and what responses one gets or hopes to get on forums like this and the opposite is just as true. As a "fanboy" of the PS3 and also a mature adult, I can more than handle negative criticism and facts about its failings or shortcomings, but still wonder about motivations for repeating the same negative mantras over and over. :confused:

As far as searches for how poor the PS3 will sell, one can find many that are saying it will do just the opposite. One thing for sure is that time will tell what no crystal ball can.

I am one of those who will never use the PS3 for gaming (in fact it will never even connect to the Internet). So I am grateful to those who game and to Sony for subsidizing my PS3.

Right now the PS3 has about an 18% marketshare for HW and far less for SW, and yet Sony fans keep saying it will end up like the PS2...when it is tracking gamecube sales.The PS3 has done well in Europe (http://www.eurogamer.net/article.php?article_id=137142) and has surpassed the Xbox 360 in total sales even though the Xbox 360 had a 16 month lead. The PS3 has outsold the Xbox 360 in North America for several months this year with the June NPD numbers being 405K vs 220K (http://www.joystiq.com/2008/07/18/june-npd-ps3-gets-metal-gear-bump-nintendo-makes-devilish-deal/). And based on the hardware sales from launch (http://vgchartz.com/hwlaunch.php?cons1=PS3&reg1=All&cons2=X360&reg2=All&cons3=GC&reg3=All&weeks=120) the PS3 is tracking higher than the Gamecube or Xbox 360. Just wanted to point out a few things that are going well for the PS3.


In 3 years, the Wii will still rule the cheaper consoles (and over all), and the new Xbox will be out continuing high-end sales dominance. The PS4 won't be out for another after that.Everdog, considering that you are skeptical of analysts who have predicted things about the PS3 for 6 months to 18 months into the future you should understand why we would be skeptical of your predictions for 3 years into the future. Also just my opinion but I have a bit more trust in the data collection skills of the analysts who work for DFC Intelligence (http://www.gamesindustry.biz/articles/dfc-current-console-installed-base-to-exceed-last-gen-in-2011) and Electronic Arts (http://www.gamesindustry.biz/articles/ea-expects-ps3-to-outsell-360-in-2008).


Please just do a search. There are lots of other articles besides the one I quoted. You will find one in about 10 seconds on google.Everdog, I believe that he was asking about the predictions you made for 3 years into the future.

The PS3 has outsold the Xbox 360 in North America for several months this year with the June NPD numbers being 405K vs 220K (http://www.joystiq.com/2008/07/18/june-npd-ps3-gets-metal-gear-bump-nintendo-makes-devilish-deal/).

Did you notice something in that article's title? In case you missed it: "PS3 gets Metal Gear bump" I think it's safe to say that PS3 sales were up 94.06% that month because of MGS4. Even if the PS3 somehow manages to keep up that exact same lead every month it would still take about 3 years to catch up to the Xbox360 and it's got absolutely no hope of catching up to the Wii as the Wii would have to not sell a single console starting from right now for the PS3 to catch it up in 3 years and even that's only if it kept selling 405,000, a month every month.

What date is that?

Is that August 11, 2008?

A palindrome date, as it were. Obviously an international date format, so November 8, 2008 :)

I am one of those who will never use the PS3 for gaming (in fact it will never even connect to the Internet). So I am grateful to those who game and to Sony for subsidizing my PS3.

Therein lies the rub. This is great for the studios (including Sony's HD Home Video Division), but not so good for the gaming division since it lowers the attachment rate, thereby increasing the breakeven (or target profitability goals) period for each console.

IF format royalties were easy money, then Toshiba, THE major holder of DVD IP would be giving away DVD players (which cost less than $50) with every stick of gum purchased since Toshiba makes money of any DVD sold :)

I guess without the format war, deals would have been done differently and ironically it is the studios who complained about a format war who probably are the biggest gainers here. The world works in mysterious ways :)

my PS3 is 80/20 id say 80% movies and 20% games. I've had the system for almost an year. I've got 7 games and 40 movies

The PS3 has done well in Europe (http://www.eurogamer.net/article.php?article_id=137142) and has surpassed the Xbox 360 in total sales even though the Xbox 360 had a 16 month lead. The PS3 has outsold the Xbox 360 in North America for several months this year with the June NPD numbers being 405K vs 220K (http://www.joystiq.com/2008/07/18/june-npd-ps3-gets-metal-gear-bump-nintendo-makes-devilish-deal/). And based on the hardware sales from launch (http://vgchartz.com/hwlaunch.php?cons1=PS3&reg1=All&cons2=X360&reg2=All&cons3=GC&reg3=All&weeks=120) the PS3 is tracking higher than the Gamecube or Xbox 360. Just wanted to point out a few things that are going well for the PS3.



Please do not rely on vgchartz for data.

After 10 months the the PS3 was 22% behind the gamecube (http://www.gamepro.com/news.cfm?article_id=137448) and that is from NPD which is a much more reliable source. I think they did finally past them in HW sales a few months ago, but are still in the low teens for SW marketshare(the PS3 is an terrible attach rate).

The fact the we are comparing the PS3 to the gamecube says it all.:D

I never said the PS3 is doing better because it is losing to the competition. I did say it isn't doing as bad as you and others claim taking into account how well the Wii and 360 are selling.

Let's bust another myth. The PS3 did not lose most of its exclusives simply because of coming out late, being to expensive or some other bogus reason. It lost exclusives because the software companies wanted to make more money and diversify sales into other consoles that are selling well which is way more than any other reason.



When you have a high market share like the PS2 did, it is very easy to gain and retain exclusives. It is cheaper for developers to create games for one platform, and much less of a gamble.

Sadly, Sony delayed the PS3 (for Blu-ray) which allowed the 360 to build marketshare, and made developers take notice. Suddenly they realized that the PS3 was not going to be like the PS2 and so they created teams to start making games for the 360 which built a big lead...so yes, it is true that Sony lost exclusives because of the delay and poor sales.

Everdog, considering that you are skeptical of analysts who have predicted things about the PS3 for 6 months to 18 months into the future you should understand why we would be skeptical of your predictions for 3 years into the future. Also just my opinion but I have a bit more trust in the data collection skills of the analysts who work for DFC Intelligence (http://www.gamesindustry.biz/articles/dfc-current-console-installed-base-to-exceed-last-gen-in-2011) and Electronic Arts (http://www.gamesindustry.biz/articles/ea-expects-ps3-to-outsell-360-in-2008).



EA is the largest maker of PS3 games and is very dependent on their success. I think they are rather biased.

Here are a couple quotes that make me "skeptical of analysts who have predicted things about the PS3"...

The analyst group believes Sony will lead in next-gen market share by 44%, with Xbox 360 taking a close 40% share, followed by Wii with a wee little bitty 16% share. That's a safe projection considering the PS2 sold a gazillion units this last generation.

Hardware market share for the next cycle is predicted to be 45%-50% for Sony, Microsoft at 35%-40% and Nintendo with 15%.

Again, everyone kept saying the PS3 would be the leader like the PS2. Many still keep saying that even though the Wii keeps kicking PS3 butt in HW sales and the 360 keeps winning in SW sales.

and FYI, HW sales are meaningless if you can't sell SW. Show me something that says the PS3 SW sales are great.:D

and FYI, HW sales are meaningless if you can't sell SW. Show me something that says the PS3 SW sales are great.:DThen why don't you show us evidence that "PS3's attach rate is horrible"? It's one of many claims you've made here without backing it up.

Sorry, we are not going to start this discussion again for obvious reasons

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