If they keep cutting prices on their players, they aren't gonna gain any profit back from selling HD-DVD players now at the rate they're going now.

Now that they've reached the $99-199 mark, it has to stay that way forever as consumers expect that now. They're gonna have a tough time gaining back their losses after it's all said and done.

Remember, VHS won because of Porn, not because of jacking down prices.

Clearly, this is a sign of desperation and let's just hope Toshiba doesn't bow out if they happen to win this war.

Unless of course if Sony exists with Blu-ray, they jack up the prices again.

Even if Toshiba loses $100 a player, they can safely sell thousands and still not lose the kind of money Sony just lost.

Remember, they have very deep pockets compared to Sony right now.

???

The $99 players are the older HD-A2 and it's a wal-mart promotion. Could very well be that walmart is discounting the players on their own as a way to increase foot traffic in their stores.

Also, not sure what you mean by blu-ray revenues are double. They sell less stand alone players and the general consensus is that they are selling the PS3 at a loss. They also do not have the 2-1 software sales they used to now that they've lost access to Paramount/DW.

Even if Toshiba loses $100 a player, they can safely sell thousands and still not lose the kind of money Sony just lost.

Remember, they have very deep pockets compared to Sony right now.

Of course they do, they are still getting royalties on DVDs.. Another reason they don't want to loose these to Sony if Blu-Ray wins.. Sure Sony lost a lot but there up this year in sales... Sony has a lot deeper pockets than you would think...

Toshiba makes billions off the royalties of DVD. They also stand to make billions off HD DVD if it takes off. This is the big advantage that Toshiba has over all the other CEs. Not a sign of desperation. If you do some reading you will see that the MSRP for the players is $199. The retailers are the ones driving down prices right now. First Walmart, then Sears, and not soon after Circuit City and Best Buy. Sony has lost much more in the PS3 and paying for BD replication than Toshiba will lose in the next 3 months.

???

The $99 players are the older HD-A2 and it's a wal-mart promotion. Could very well be that walmart is discounting the players on their own as a way to increase foot traffic in their stores.

best buy joined on the promo. tho like you said, it's only the HD-A2 which has already been replaced by the A3. seems more like WM and BB are liquidating old stock (prob getting rebates from Toshiba) to be replaced with new.

also, afaik this deal is one-day only, it's not some official price drop.

to answer the question in title, what else can Toshiba do? they're selling only about half as much software as BD, their only option is to drop player prices. while sony can cut prices on their own software as they did on the BOGO week, Toshiba doesnt have their own software nor any partners in hardware to really increase software sales.

the ps3 is killing sony's bottom line thats why.... toshiba actually has more money to blow here.

Toshiba makes billions off the royalties of DVD. They also stand to make billions off HD DVD if it takes off. This is the big advantage that Toshiba has over all the other CEs. Not a sign of desperation. If you do some reading you will see that the MSRP for the players is $199. The retailers are the ones driving down prices right now. First Walmart, then Sears, and not soon after Circuit City and Best Buy. Sony has lost much more in the PS3 and paying for BD replication than Toshiba will lose in the next 3 months.

well said, pretty much both sides are bleeding money to see their respective formats succeed.

Of course they do, they are still getting royalties on DVDs.. Another reason they don't want to loose these to Sony if Blu-Ray wins.. Sure Sony lost a lot but there up this year in sales... Sony has a lot deeper pockets than you would think...


I didn't say it mattered why they have deeper pockets. For all I know they might be selling jelly beans for a profit. I'm just stating that fact that they have more cash on hand.

I could be wrong because I haven't checked in some time, but I don't believe Sony has a large cash reserve. I believe their profits for last year were near 1 billion dollars, and their games division or whatever it's called just lost 800 million or so.

I'm sure they have some cash since they are such a large company, I'm just saying that Toshiba can absorb losses easier than Sony at the moment.

same arguments just a different thread............tsk tsk tsk attn drdon.


enough is enough blu boys just let this 99.00 go. I hope very soon that
sony will drop ps3 to sub $200.00

The $99 players are the older HD-A2 and it's a wal-mart promotion. Could very well be that walmart is discounting the players on their own as a way to increase foot traffic in their stores.

Certainly not. Walmart is not going to lose money for Toshiba's sake, and they don't need HD DVD to increase traffic in their stores, they have enough traffic from other reasons. Toshiba is taking the brunt of these deals to clear out the remainder of the A2 inventory, and to try to bump up their disc sales. HD DVD has two months left then it's "game over, thanks for playing".

If they keep cutting prices on their players, they aren't gonna gain any profit back from selling HD-DVD players now at the rate they're going now.

Now that they've reached the $99-199 mark, it has to stay that way forever as consumers expect that now. They're gonna have a tough time gaining back their losses after it's all said and done.

Remember, VHS won because of Porn, not because of jacking down prices.

Clearly, this is a sign of desperation and let's just hope Toshiba doesn't bow out if they happen to win this war.

Unless of course if Sony exists with Blu-ray, they jack up the prices again.

Can you post a link stating that Blu-ray's REVENUE is twice that of HD-DVD, we know that sales are twice that of HD-DVD but that doesn't mean revenue is. I thought this was new news.

Man, I just don't get some people's thinking... Sony is selling the PS3 at a notable loss. Doesn't matter if you sell twice as many of them.

When selling at a loss, you can't make it up with VOLUME.

MEC2

HD DVD has two months left then it's "game over, thanks for playing".
it never ceases to amaze me that people continue making definitive statements about the exact date of the end of this format war.

Certainly not. Walmart is not going to lose money for Toshiba's sake, and they don't need HD DVD to increase traffic in their stores, they have enough traffic from other reasons. Toshiba is taking the brunt of these deals to clear out the remainder of the A2 inventory, and to try to bump up their disc sales. HD DVD has two months left then it's "game over, thanks for playing".

I have to agree with this. No way Walmart is going to sacrifice their profits to push HD-DVD. If this were true the big holiday circular I just got would have had a HD-DVD player listed forsale in it. I don't know how many months Toshiba has left but they are just like Sony. They really want it and are willing to lose some money to win this. For the record I think Toshiba could drag this out for years. They don't have near as much to lose as Sony.

Even if Toshiba loses $100 a player, they can safely sell thousands and still not lose the kind of money Sony just lost.

Remember, they have very deep pockets compared to Sony right now.

But only the GAMING DIVISION lost money.

The company's profits were way up.

Please provide a link to the proof that BDs revenues are double that of HD DVD.

BD standalone players don't sell as well as Toshiba's HD DVD players and every PS3 sold loses money for Sony so, how are they making double the revenue. Maybe BD does have double the revenue but I don't see how, unless you are including software sales into this mix. Even with that, I doubt it is double. You never know though so, just provide a link to the proof or, did you just pull that little fact out of your butt.

There cash flow is double, but their profit most likely isn't.

Man, I just don't get some people's thinking... Sony is selling the PS3 at a notable loss. Doesn't matter if you sell twice as many of them.

When selling at a loss, you can't make it up with VOLUME.

MEC2

Not entirely true. Economics of scale could drop the per unit amount cost. Whether it would be enough to make it profitable in this SPECIFIC case is another question.

If they keep cutting prices on their players, they aren't gonna gain any profit back from selling HD-DVD players now at the rate they're going now.

Now that they've reached the $99-199 mark, it has to stay that way forever as consumers expect that now. They're gonna have a tough time gaining back their losses after it's all said and done.

Remember, VHS won because of Porn, not because of jacking down prices.

Clearly, this is a sign of desperation and let's just hope Toshiba doesn't bow out if they happen to win this war.

Unless of course if Sony exists with Blu-ray, they jack up the prices again.

Starting threads like this (and your other recent one) is a waste time and space. There are millions of threads already discussing the issues your talking about and you can contribute your opinions in them.

Almost 50% of the threads you've started have been locked and I have a feeling this one will be too...

Man, I just don't get some people's thinking... Sony is selling the PS3 at a notable loss. Doesn't matter if you sell twice as many of them.

When selling at a loss, you can't make it up with VOLUME.

MEC2

I can see your logic, my view is that the goal is different.

Sony's goal isn't profit when selling a ps3, the goal is market share so you can make profit on BD sales of movies and ps3 games, so volume does very much matter since it reflects the total audience for both games and movies.

-Splints

same arguments just a different thread............tsk tsk tsk attn drdon.


enough is enough blu boys just let this 99.00 go. I hope very soon that
sony will drop ps3 to sub $200.00

Well, this is the BLURAY SOFTWARE part of the forum. Are we supposed to discuss HD software instead? In reality I guess we might as well since most of the HD fanboys are over here crapping and giggling.

But to answer to OP, well, when you cram a bunch of people in a room somewhere in China, pay them practically nothing for the work they do, I guess they can get away with selling something so cheap.

Man, I just don't get some people's thinking... Sony is selling the PS3 at a notable loss. Doesn't matter if you sell twice as many of them.

When selling at a loss, you can't make it up with VOLUME.

MEC2

this is the same for all consoles. the PS2 didnt start makign a profit for sony until a few years ago and the system has been aroudn for 7 years.

I have rarely seen such inaccurate application of the terms: "revenues," "profits," and "cash flows." Fact of the matter is that the supporters of both formats are willing to take losses now to reap the rewards of having a future, ubiquitous platform. Toshiba opts to take it out of the hardware resale, blu-ray on the BOGO deals, all the same. We'll just see where this all ends.

If they keep cutting prices on their players, they aren't gonna gain any profit back from selling HD-DVD players now at the rate they're going now.

Now that they've reached the $99-199 mark, it has to stay that way forever as consumers expect that now. They're gonna have a tough time gaining back their losses after it's all said and done.

Remember, VHS won because of Porn, not because of jacking down prices.

Clearly, this is a sign of desperation and let's just hope Toshiba doesn't bow out if they happen to win this war.

Unless of course if Sony exists with Blu-ray, they jack up the prices again.

toshiba has comparable amounts of cash to sony, their plan the entire time was to fight on price. it looks like it's going to work and hd dvd will live to fight on.

Can you post a link stating that Blu-ray's REVENUE is twice that of HD-DVD, we know that sales are twice that of HD-DVD but that doesn't mean revenue is. I thought this was new news.

Revenues and sales are the same thing, at least in accounting terms. Did you mean profit? Or maybe you meant sales as in quantities sold?

Everbody is throwing out all kinds of stats.....I don't see anyone linking to any specifics. "Toshiba has deep pockets"......Sony is losing more with Blu-Ray then HD-DVD........how do you people know this?

I've seen alot of speculation on this forum and in the media, but no backup for it.

The most recent news story I read was that Sony made a ton of money last quarter but not in their gaming division.....yet.

toshiba has comparable amounts of cash to sony, their plan the entire time was to fight on price. it looks like it's going to work and hd dvd will live to fight on.

Speculation.

Why are HD-DVD backers constantly posting in the Blu-Ray section against this forum's policy?

But only the GAMING DIVISION lost money.

The company's profits were way up.

So are you saying Toshiba only has a HD-DVD division?

So are you saying Toshiba only has a HD-DVD division?

No....he is talking about Sony.

There are a lot of financial analysts in this thread.

With a very simple Yahoo finance search, you can see that for FY2007 Toshiba has a projected profit of $1.567B, while Sony has a projected profit of $3.9B. Where is all this "deeper pocket" nonsense coming from?

Not entirely true. Economics of scale could drop the per unit amount cost. Whether it would be enough to make it profitable in this SPECIFIC case is another question.
My statement is axiomatic - you cannot recover profit with volume if you sell at a LOSS. If economy of scale reduces cost to under sale price, then you not selling at a loss.

MEC2

But only the GAMING DIVISION lost money.

The company's profits were way up.

+1

Even with the gaming division loss Sony made a lot more than Toshiba the last 6 months.

There are a lot of financial analysts in this thread.

With a very simple Yahoo finance search, you can see that for FY2007 Toshiba has a projected profit of $1.567B, while Sony has a projected profit of $3.9B. Where is all this "deeper pocket" nonsense coming from?

Would you mind posting links to this?

+1

Even with the gaming division loss Sony made a lot more than Toshiba the last 6 months.

Corporations usually will view that as something they need to change. It doesn't matter if the company made great profit, if there is a division that is losing a lot of money for the company they usually change something about it or ditch it, obviously they are not going to ditch their gaming dept., but something needs to change about it. You can't keep losing money for the company and expect to not get effected

Would you mind posting links to this?

http://stocks.us.reuters.com/stocks/keyDevelopments.asp?symbol=6758.T&WTmodLOC=L2-LeftNav-12-KeyDevelopments

Sony Corporation Raises FY 2007 Operating Profit Guidance-Reuters

Thu Oct 25 15:28:00 EDT 2007

Reuters reported that Sony Corporation has raised its operating profit forecast by 2% for fiscal 2007. According to Reuters Estimates, analysts were expecting the Company to report EBIT of JPY 443.5 billion for the same period.

Toshiba


http://www.toshiba.co.jp/about/ir/en/library/er/er2007/h1/ter2007h1e_01.pdf

Can't cut and paste from a PDF, but the FY2007 outlook is on the bottom of page 3 and the rest of page 4.

Yen - Dollar calculator - http://www.xe.net/cgi-bin/ucc/convert

it never ceases to amaze me that people continue making definitive statements about the exact date of the end of this format war.

Oh you didn't hear? The war ended at CES 07. Duh.

No....he is talking about Sony.

I realize that. There's plenty of "bleeding dry" talk from both sides here. Which leads me to think some of you think Sony's main focus is the PS3 and Toshiba's main focus is the A2. Both have a tremendous amount of revenue from many divisions. Their Hi-Def or Gaming divisions are but a small blip on their budget. and neither company is in danger of being bled by any stretch of the imagination anytime soon. Either company could afford to give away free units for a year if they really wanted to and they would still be sitting just fine.

If they keep cutting prices on their players, they aren't gonna gain any profit back from selling HD-DVD players now at the rate they're going now.

Now that they've reached the $99-199 mark, it has to stay that way forever as consumers expect that now. They're gonna have a tough time gaining back their losses after it's all said and done.

Remember, VHS won because of Porn, not because of jacking down prices.

Clearly, this is a sign of desperation and let's just hope Toshiba doesn't bow out if they happen to win this war.

Unless of course if Sony exists with Blu-ray, they jack up the prices again.

Silly argument you have here, of course price matters. This is not desparation at all and there won't be any price jump.
Any of the format "wins" the pressure for price reduction will be even greater, as more MFRs will produce players.This will be especially true for BD since they don't seem to get the message. I currently waiting to get a good player [BD] but with their current pricing just won't happen for me. While PS3 is reasonable [and pretty much drives the BD market] their stand alone players just too expensive or incomplete for consideration for me at least for the momment. We shall see!

Silly argument you have here, of course price matters. This is not desparation at all and there won't be any price jump.
Any of the format "wins" the pressure for price reduction will be even greater, as more MFRs will produce players.This will be especially true for BD since they don't seem to get the message. I currently waiting to get a good player [BD] but with their current pricing just won't happen for me. While PS3 is reasonable [and pretty much drives the BD market] their stand alone players just too expensive or incomplete for consideration for me at least for the momment. We shall see!

Price does matter, however Toshiba is artificially reducing their prices to try and stay in this thing.

This is not a normal scenario.

If you recall, DVD took a few years before prices became reasonable and now dirt-cheap. The first players were $1,000 - $1,500. Two to three years later when I entered the market, I picked up a Sony DVP-550D for $450 at a "deal" price.

I realize that. There's plenty of "bleeding dry" talk from both sides here. Which leads me to think some of you think Sony's main focus is the PS3 and Toshiba's main focus is the A2. Both have a tremendous amount of revenue from many divisions. Their Hi-Def or Gaming divisions are but a small blip on their budget. and neither company is in danger of being bled by any stretch of the imagination anytime soon. Either company could afford to give away free units for a year if they really wanted to and they would still be sitting just fine.

The gaming divisions are bigger then you think.

That aside, no company wants to lose money on anything they do. Period.

Both Toshiba and Sony are investing in a future that they think will make them money in the long run. Dont' kid yourself, both companies have a gameplan and timeline to try and make this work. If it gets to be too much or bleeds them dry, they will get out.

If HD-DVD fails, Toshiba will make Blu-Ray players. If Blu-Ray fails, Sony will make HD-DVD players just like they did when Beta bit the bullet and they made VHS decks.

Either side may not be happy about it, but they will go where the money is.

The gaming divisions are bigger then you think.

That aside, no company wants to lose money on anything they do. Period.

Both Toshiba and Sony are investing in a future that they think will make them money in the long run. Dont' kid yourself, both companies have a gameplan and timeline to try and make this work. If it gets to be too much or bleeds them dry, they will get out.

If HD-DVD fails, Toshiba will make Blu-Ray players. If Blu-Ray fails, Sony will make HD-DVD players just like they did when Beta bit the bullet and they made VHS decks.

Either side may not be happy about it, but they will go where the money is.

Dude, come on.
Of course I know they want to make money.
All I was trying to say is that neither company is any real danger right now while heavily subsidizing these units. Of course they don't want to lose money...who does? I was simply trying to tone the melodrama of "the bleeding" down a notch. Both companies have deep, deep pockets. Most people here know Sony's torrid history of pushing formats. and I think all of us can safely say they have no fear of losing format battles by now.
and of course either manufacturer will end up making hardware that supports the winner of this format war. Only a fool would suggest otherwise.

while losses in one division of a profitable company may be trivial in the grand scheme of things, the market doesn't see it that way.

The losses get the attention. The attention deters people from investing in the stock, driving down the share price. When the share price dips the executive team is fired.

Since we know the executives want to keep their personal money train coming in, they will take action to reverse losses in any division of an otherwise profitable company.

When the share price dips the executive team is fired.

Since we know the executives want to keep their personal money train coming in, they will take action to reverse losses in any division of an otherwise profitable company.

Uh, it's not quite that simple. Executive teams get fired when they screw up big, Sony's not close to that bad yet. The level of pain companies will take all depends on projections for future growth, etc. Heck, look at msft, they've lost $6 Billion+ in their xbox division but they kept on subsidizing units and chugging along. I agree the losses are irritating for sne shareholders, but the losses WERE expected, they're just a little worse so far than expected. If it continues for a whole nother yr or so, shareholders will start to get irritated.

Like others have said, sony realizes that blu ray could be a huge cash cow down the road. Subsidizing prices now to get things off the ground make perfect sense. Heck, if Toshiba wasn't operating at probably razor thin margins on their standalone hd-dvd players the format war would likely be over by now.

while losses in one division of a profitable company may be trivial in the grand scheme of things, the market doesn't see it that way.

The losses get the attention. The attention deters people from investing in the stock, driving down the share price. When the share price dips the executive team is fired.

Since we know the executives want to keep their personal money train coming in, they will take action to reverse losses in any division of an otherwise profitable company.

That all depends on what the company's forecast is. If their forecast for the quarter/year, etc. comes in below that amount then that affects the numbers on Wall Street. Many companies forecast losses as they try and recoup and their stock can actually go up if they beat that forecast.

Dude, come on.
Of course I know they want to make money.
All I was trying to say is that neither company is any real danger right now while heavily subsidizing these units. Of course they don't want to lose money...who does? I was simply trying to tone the melodrama of "the bleeding" down a notch. Both companies have deep, deep pockets. Most people here know Sony's torrid history of pushing formats. and I think all of us can safely say they have no fear of losing format battles by now.
and of course either manufacturer will end up making hardware that supports the winner of this format war. Only a fool would suggest otherwise.

Dont' call me Dude:)

So what you are essentially saying is the same thing as me.....both companies will continue to pursue these products till they feel one of them can't benefit the company.

Toshiba knows that they are in big trouble, they will try to do anything to stay in this war. As long as BD can hold the lead that it has the entire year, Warner will be exclusive to BD. Toshiba knows this and has to do something, just like they did with Paramount/Dreamworks. It is a smart business move on their part, I just don't think it is going to pan out for them.

Toshibas HD DVD players are part of their consumer electronics group that saw a 6% increase in revenue and an even higher % increase in profits. AFAIR. Sony's, BD costs are mostly tied to the gaming division - which lost record $$ last Q. Overall, I believe profits for both companies were pretty close. Tosh, AFAIR has more cash (and cash equivalents) than Sony on their balance sheet. Hence why Sony has been selling various units for cash. A company can be profit rich and cash poor (MSFT clout comes from their cash reserve, not revenue or profits per se).

To those people who are expecting Warner to go Blu Ray exclusive, you are going to be disappointed - BIG TIME.

Here is what Warner is doing. They are trying to make their HD DVD exclusive announcement as gentle as possible to the Blu Ray supporters as possible. This includes:

1. Saying we are not going to take money to make our decision.

2. We are looking at 'stand alone' hardware sales. We are not going to rely on a 'game console' as the primary device. 300 was targetted to the PS3.

3. We are looking at Q4 sales, sales data will be another point of information...

Unless the HD DVD standalone sales fail totally, Warner will say based on hardware share of standalones and the costs of supporting each format and the advanced interactivity of HD DVD, in the interest of their consumers they are going HD DVD exclusive.

You can take this to the bank. Major retailers have this info and are hence taking a more pro HD DVD stance :)

To those people who are expecting Warner to go Blu Ray exclusive, you are going to be disappointed - BIG TIME.

Here is what Warner is doing. They are trying to make their HD DVD exclusive announcement as gentle as possible to the Blu Ray supporters as possible. This includes:

1. Saying we are not going to take money to make our decision.

2. We are looking at 'stand alone' hardware sales. We are not going to rely on a 'game console' as the primary device. 300 was targetted to the PS3.

3. We are looking at Q4 sales, sales data will be another point of information...

Unless the HD DVD standalone sales fail totally, Warner will say based on hardware share of standalones and the costs of supporting each format and the advanced interactivity of HD DVD, in the interest of their consumers they are going HD DVD exclusive.

You can take this to the bank. Major retailers have this info and are hence taking a more pro HD DVD stance :)

It was inevitable. WB was also waiting on the 3 layer disks as well for New Line and some of their TV shows. They are the largest proponents of wanting a three-layer option. The war will be a stand still because Disney will never add HD-DVD. FOX makes the movies for Lionsgate and Anchor Bay so we will never see them on HD-DVD either. Sony will never be on HD-DVD.

Even though WB is the largest studio on earth, it isn't going to change Disney or Fox's mind to go HD-DVD or neutral.

Revenues are an absolutely pointless thing to track. You can have all the revenue in the world and still not make a profit.

Definitive statements like Sony, Disney, or FOX never going HD DVD are dumb as well. They are concerned about profits not which format wins the war, if HD DVD were to win they would eventually release on that format.

Sony is making a profit:

http://www.beyond3d.com/content/news/515

But as the article points out, any more cuts in price to the PS3, and it will get less.

They made $645m in the 3rd quarter

The contribution of the gaming division: http://www.joystiq.com/2007/10/25/losses-in-sonys-games-division-double/

If they keep cutting prices on their players, they aren't gonna gain any profit back from selling HD-DVD players now at the rate they're going now.

Now that they've reached the $99-199 mark, it has to stay that way forever as consumers expect that now. They're gonna have a tough time gaining back their losses after it's all said and done.

Remember, VHS won because of Porn, not because of jacking down prices.

Clearly, this is a sign of desperation and let's just hope Toshiba doesn't bow out if they happen to win this war.

Unless of course if Sony exists with Blu-ray, they jack up the prices again.

please post links to back up this outrageous claim or change thread to reflect that this is YOUR opinion.:confused:

Dont' call me Dude:)

So what you are essentially saying is the same thing as me.....both companies will continue to pursue these products till they feel one of them can't benefit the company.

For the record I wasn't calling you Dude, I was using it in the pseudo Keanu form as a general expression of confusion and frustration. ;)


and yeah, beyond semantics. I don't think we are disagreeing on anything here.
Success!

It was inevitable. WB was also waiting on the 3 layer disks as well for New Line and some of their TV shows. They are the largest proponents of wanting a three-layer option. The war will be a stand still because Disney will never add HD-DVD. FOX makes the movies for Lionsgate and Anchor Bay so we will never see them on HD-DVD either. Sony will never be on HD-DVD.

Even though WB is the largest studio on earth, it isn't going to change Disney or Fox's mind to go HD-DVD or neutral.


Ask Divx is you should be using the word "never".
Sony and Universal will go down with their respective format ships. But that being said at some point all studios will be releasing on one format. If HD DVD wins Sony I presume will keep BR alive in some form for PS3 games and possibly in the computer optical storage market. But they would put their movies out on HD DVD. Of course if BR wins we will see Toshiba BR players hit the market within that year.

The trouble with Toshiba's strategy is that not all manufacturers want to race to the bottom and have ZERO profits on their players. This is the quickest sell off of product in the history of pre-recorded media. Blu-ray manufacturers saw their profit margins dwindling with DVD and chose accordingly. They didn't like Toshiba's Wal-Mart pricing structure. Many don't have ties to the media that they are making players for, like Toshiba with HD-DVD, which can make some losses up with royalties.

Let's face it. Toshiba sees this as a last ditch effort to flood the market with HD-DVD players. But they can't continue to sell them for $98. That way lies madness... and other manufacturers know it. No wonder Toshiba is the only maker of HD-DVD standalones. Even the Onkyo player is a Toshiba.

Dan

The trouble with Toshiba's strategy is that not all manufacturers want to race to the bottom and have ZERO profits on their players. This is the quickest sell off of product in the history of pre-recorded media. Blu-ray manufacturers saw their profit margins dwindling with DVD and chose accordingly. They didn't like Toshiba's Wal-Mart pricing structure. Many don't have ties to the media that they are making players for, like Toshiba with HD-DVD, which can make some losses up with royalties.

Let's face it. Toshiba sees this as a last ditch effort to flood the market with HD-DVD players. But they can't continue to sell them for $98. That way lies madness... and other manufacturers know it. No wonder Toshiba is the only maker of HD-DVD standalones. Even the Onkyo player is a Toshiba.

Dan


This is your opinion. However, you need to look at other comparable items in the market place. DVD players, you can buy them for $25-50, sometimes get them free. Does this stop Onkyo, Denon or many other manufacturers from selling them for $200 or higher? There is always going to be a entry level product for almost all consumer electronics. This isnt a last ditch effort buy Toshiba.
You are right in one thing, Toshiba has the only standalone players for HD DVD. However, there is a higher end Onkyo player already being made and several other CE have released or are working on dual format players.

As was mentioned earlier, Toshiba could GIVE AWAY the A2s and still lose less per unit than Sony is losing on the PS3.

Toshiba is probably losing far less on their HD DVD strategy than either Sony or Panny is on their BD strategy...Sony on the hardware side, Panny on the software. Tosh is simply using their competitive advantage vis-a-vis cost to drive a stake into the BDA. The only thing the BDA can do is to create FUD and pay off the low end media types...

Toshibas HD DVD players are part of their consumer electronics group that saw a 6% increase in revenue and an even higher % increase in profits. AFAIR. Sony's, BD costs are mostly tied to the gaming division - which lost record $$ last Q. Overall, I believe profits for both companies were pretty close. Tosh, AFAIR has more cash (and cash equivalents) than Sony on their balance sheet. Hence why Sony has been selling various units for cash. A company can be profit rich and cash poor (MSFT clout comes from their cash reserve, not revenue or profits per se).

Does anyone actually look up facts or just repeat what you read on these forums? You do realize this is public knowledge?

http://stocks.us.reuters.com/stocks/balanceSheet.asp?symbol=SNE&WTmodLOC=L2-LeftNav-17-FinancialStatements&period=A

http://stocks.us.reuters.com/stocks/balanceSheet.asp?symbol=TOSBF.PK&WTmodLOC=L2-LeftNav-17-FinancialStatements&period=A

To those people who are expecting Warner to go Blu Ray exclusive, you are going to be disappointed - BIG TIME.

Here is what Warner is doing. They are trying to make their HD DVD exclusive announcement as gentle as possible to the Blu Ray supporters as possible. This includes:

1. Saying we are not going to take money to make our decision.

2. We are looking at 'stand alone' hardware sales. We are not going to rely on a 'game console' as the primary device. 300 was targetted to the PS3.

3. We are looking at Q4 sales, sales data will be another point of information...

Unless the HD DVD standalone sales fail totally, Warner will say based on hardware share of standalones and the costs of supporting each format and the advanced interactivity of HD DVD, in the interest of their consumers they are going HD DVD exclusive.

You can take this to the bank. Major retailers have this info and are hence taking a more pro HD DVD stance :)

wow, you are living in some sort of fantasyland.

Does anyone actually look up facts or just repeat what you read on these forums? You do realize this is public knowledge?

http://stocks.us.reuters.com/stocks/balanceSheet.asp?symbol=SNE&WTmodLOC=L2-LeftNav-17-FinancialStatements&period=A

http://stocks.us.reuters.com/stocks/balanceSheet.asp?symbol=TOSBF.PK&WTmodLOC=L2-LeftNav-17-FinancialStatements&period=A

Post of the day right there.....LOL!!!

Post of the day right there.....LOL!!!

Ditto. I think AVS should start offering online classes in marketing and economics. Some people could greatly benefit from them.

Can anyone name me a company who gave away products to gain marketshare and won? I can't.

Can anyone name me a company who gave away products to gain marketshare and won? I can't.

Yeah, Gillette gives away razor blades for free, but then people buy the expensive refills. Somewhat similar situation here, toshiba gives away the player but will make money on the hddvd royalties and sales.

Yeah, Gillette gives away razor blades for free, but then people buy the expensive refills. Somewhat similar situation here, toshiba gives away the player but will make money on the hddvd royalties and sales.

That is not the same thing because it is an industry practice. I am referring to a normall business model where a company decides in order to gain marketshare, it will make no profit or lose money hoping it will pay off in the long run. For example, look at AMD. Sure they have gained marketshare but boy they have been losing billions of dollars in the process while Intel is happily raking in the profit.

Can anyone name me a company who gave away products to gain marketshare and won? I can't.

America Online - Gave away software and airtime and made millions.
Cable and Satilite services - Give away programming to entice package sales.
Cellular phone companies - Give away phones to get service plan sales.
Razor manufactureres - Give away the razor to sell blades.
Swiffer Brooms - given away to sell the replacement heads.
Blockbuster and Netflix - Give away free rentals to get more rentals.
DVD and CD clubs - Give away disks to sell more.
Movie and Music download sites - Give away downloads to sell more later.
Video game consoles - Sold at a loss to sell more games.

This form of marketing is not new. Its done in many forms of buisiness. May not be exactly the same, but it is done.
Another thing to point out. Toshiba makes billions in DVD royalties and makes royalties off of HD DVD. This is a advantage no other CE has. Sony will take more of a loss on the PS3 in the next 3 months, than Toshiba will on the A-2.

That is not the same thing because it is an industry practice. I am referring to a normall business model where a company decides in order to gain marketshare, it will make no profit or lose money hoping it will pay off in the long run. For example, look at AMD. Sure they have gained marketshare but boy they have been losing billions of dollars in the process while Intel is happily raking in the profit.

That answer is easy. Look at the PS3 and Sony. Or any video game system released. Those consoles are sold at a lose. If they were not, launch systems would cost way to much for mass adoption. If its a game console or HD media player it doesnt matter. Its about selling software. If it pays off down the road, is another matter. However, you first need the hardware in the marketplace.

Of course AOL didn't do so well in the long term. Massive subscriber and stock value loss. Large layoffs.

Giving away CDs worth pennies is an order of magnitude cheaper than selling HD DVD players manufactured back in Oct 06 for $98.

Certainly not. Walmart is not going to lose money for Toshiba's sake, and they don't need HD DVD to increase traffic in their stores, they have enough traffic from other reasons. Toshiba is taking the brunt of these deals to clear out the remainder of the A2 inventory, and to try to bump up their disc sales. HD DVD has two months left then it's "game over, thanks for playing".

You seem to be able to predict the future. Can you give me the lottery numbers for the next big payoff? You statement is the most ridiculous I've read tonight!

Is this the Blu-Ray Software forum? Why are there so many HD-DVD backers posting here? Are you people bored with your own forum?

There is a note from the moderators that says if you are not here for Blu-Ray...go away.

I don't get it. I never visit the HD-DVD forums because there is nothing of interest for me there.

Don't you people have anything better to do?

That answer is easy. Look at the PS3 and Sony. Or any video game system released. Those consoles are sold at a lose. If they were not, launch systems would cost way to much for mass adoption. If its a game console or HD media player it doesnt matter. Its about selling software. If it pays off down the road, is another matter. However, you first need the hardware in the marketplace.

For the CE manufacturers, they need to make money on hardware. That's what they do to survive. There are razor thin profit margins on DVD players now, HD is the new lamb with fat on it.

For the movie studios, they need to make money on software.

For the technology IP license holders, they want to make money on royalties (either hardware or software or both).

For success in the marketplace, each of these parties must be satisfied.

I cannot fathom the CE manufacturers on the HD DVD side being satisfied at all. Yes, there may be some small quantities of higher end models sold, but Tosh have ripped the guts out of the mid/low end market.

For the CE manufacturers, they need to make money on hardware. That's what they do to survive. There are razor thin profit margins on DVD players now, HD is the new lamb with fat on it.

For the movie studios, they need to make money on software.

For the technology IP license holders, they want to make money on royalties (either hardware or software or both).

For success in the marketplace, each of these parties must be satisfied.

I cannot fathom the CE manufacturers on the HD DVD side being satisfied at all. Yes, there may be some small quantities of higher end models sold, but Tosh have ripped the guts out of the mid/low end market.

HD media players and DVD players are in the same boat. You can get a DVD player for $25-50, sometimes free. This doesnt stop many companies from selling players for $200 and up. Toshiba makes royalties on almost every DVD sold in the world. They also make royalties on HD DVD. Just the HD DVD royalties alone put it in a video game console scenario. If video game consoles can be sold at a loss to make money on software. Why cant HD DVD players?

Yes, Toshiba can afford to sell machines at a loss because they get cashflow from the media sales and DVD sales. Same with Sony and the PS3, gaming revenue and media sales. But other CE manufacturers for HD DVD don't have the same income offset. If they sell their machines at a loss they are non-viable in the longer term.

Can Toshiba single handedly bring forth the victory of hd dvd? It would seem from past history that a single manufacturer doesn't hold such a sway.

Yes, Toshiba can afford to sell machines at a loss because they get cashflow from the media sales and DVD sales. Same with Sony and the PS3, gaming revenue and media sales. But other CE manufacturers for HD DVD don't have the same income offset. If they sell their machines at a loss they are non-viable in the longer term.

Can Toshiba single handedly bring forth the victory of hd dvd? It would seem from past history that a single manufacturer doesn't hold such a sway.

Toshiba has only got a huge price drop on a entry level player. The other players pricing (other than sales) have not moved that much. So, if Onkyo was planning a entry level 1080i player they would be pissed. However, they are planning a higher line player. Denon has a much more expensive player in the works for BD. Do you think they are pissed at Sony for lowering the price on the PS3? Or Samsung for selling a player for a lower price? There will always be different levels of pricing on electronic products. How they perform and what they offer will always vary. Yes, selling at a loss long term is not a good thing. I dont think the loss Toshiba is taking is really all that large and I dont think it will be "long term". Honestly, cant see it being a effective loss for more than 3 months. Much better than the losses that video game console makers must take in their first year or more. (Not just refering to PS3. All of them take losses in some shape or form.)

The way HD DVD and BD groups approach hardware and software marketing is different in alot of ways. However, its all about getting marketshare and overall sales. If one of these marketing plans works better than the other, great.

If it wasnt for both of them being around right now. The consumer would be looking at $800 players still and no BOGO sales on software. This is a good thing.

One thing is for sure. They need to drop those software prices across the board. Not just sales, or promotions. That will help sway people from DVD.

The way HD DVD and BD groups approach hardware and software marketing is different in alot of ways. However, its all about getting marketshare and overall sales. If one of these marketing plans works better than the other, great.

If it wasnt for both of them being around right now. The consumer would be looking at $800 players still and no BOGO sales on software. This is a good thing.

One thing is for sure. They need to drop those software prices across the board. Not just sales, or promotions. That will help sway people from DVD.

Totally agree with you... Keep the software sales low, like under $20 bucks and I bet more people would be jumping on board.. Yesterday I found Home of the Brave at BB on DVD for $24.95, yes a DVD!! I found the same Blu-Ray at BB for $24.95 that was pretty easy pick.... But again, they need to be below $20 bucks if they really want to sway...

To those people who are expecting Warner to go Blu Ray exclusive, you are going to be disappointed - BIG TIME.

Here is what Warner is doing. They are trying to make their HD DVD exclusive announcement as gentle as possible to the Blu Ray supporters as possible. This includes:

1. Saying we are not going to take money to make our decision.

2. We are looking at 'stand alone' hardware sales. We are not going to rely on a 'game console' as the primary device. 300 was targetted to the PS3.

3. We are looking at Q4 sales, sales data will be another point of information...

Unless the HD DVD standalone sales fail totally, Warner will say based on hardware share of standalones and the costs of supporting each format and the advanced interactivity of HD DVD, in the interest of their consumers they are going HD DVD exclusive.

You can take this to the bank. Major retailers have this info and are hence taking a more pro HD DVD stance :)

Toshiba is probably losing far less on their HD DVD strategy than either Sony or Panny is on their BD strategy...Sony on the hardware side, Panny on the software. Tosh is simply using their competitive advantage vis-a-vis cost to drive a stake into the BDA. The only thing the BDA can do is to create FUD and pay off the low end media types...


and you certainly know FUD when you write it.

Yes, Toshiba can afford to sell machines at a loss because they get cashflow from the media sales and DVD sales. Same with Sony and the PS3, gaming revenue and media sales. But other CE manufacturers for HD DVD don't have the same income offset. If they sell their machines at a loss they are non-viable in the longer term.

Can Toshiba single handedly bring forth the victory of hd dvd? It would seem from past history that a single manufacturer doesn't hold such a sway.Yes, Toshiba can ....... sell machines at a loss because they get cashflow from ....... DVD sales.And they would get cashflow from DVD sales whether they sold HD-DVDs or not. Perhaps they are actually viewing their HD-DVD losses as a way of SLOWING aggregate high definition adoption. Perhaps their real intent is to somehow keep DVDs being one of their "cash cows". I can't think of any reason (beyond the Toshiba executives loing their reason) besides that for why they'd want to continually sell CE product at a loss.

And they would get cashflow from DVD sales whether they sold HD-DVDs or not. Perhaps they are actually viewing their HD-DVD losses as a way of SLOWING aggregate high definition adoption. Perhaps their real intent is to somehow keep DVDs being one of their "cash cows". I can't think of any reason (beyond the Toshiba executives loing their reason) besides that for why they'd want to continually sell CE product at a loss.

Wait,

did you just suggest Toshiba is selling $99 HD DVD players to slow adoption of HD DVD? That would be, um, interesting...

Does anyone know how much it costs Toshiba to currently manufacture the A3?
Does anyone know how much they might be actually losing from each A2? I can't really see any huge difference between selling the A2 at a loss and selling the PS3 at a loss. The only big difference is Sony has been doing it from day one while Toshiba is just now starting to do it with a model they no longer manufacture.