Originally Posted by plazman
Tosh's subsidy of HD DVD is not close to what BD is doing. At this point Toshiba is probably already breaking even or making money.
IMHO, the BD economics is not sustainable. But only time will tell. I will not be surprised even if many BD backers while taking Sonys 'handout with a smile are aware of the burden they are placing on Sony. All they have to do is say, we support BD and Sony takes care of the rest - it's called an entourage
Will this be a quagmire for Sony? Not if they sell a lot of games to 50 million PS3 owners and are able to back away from subsidizing the big studios....and raising BD disk prices.
We haven't seen the end of this yet.
If the trend in disk sales continues, blu-ray will win the format war. In that event, blu-ray will not have competitive pressure from Toshiba hardware and HD DVD software. That will allow Sony and others to hold the line on standalone prices. Prices for blu-ray hardware will come down very slowly (glacier pace).
Disk prices may rise. Sony will reduce its subsidies for disk replication. Blu-ray will charge whatever the hd market will bear. PS3 prices will hold steady until economies of scale turn a profit for Sony. Independent movie studios will stay with DVD (given the expense of producing on blu-ray).
People like myself will not buy blu-ray hardware or software (we only got into the game because of affordability) for years, if ever. In other words, the whole introduction of hd hardware will go into reset or default mode, where low prices appear only very slowly. That will keep hd a niche market for longer than if HD DVD were applying pressure.
Sony has bet the bank on this. They are not going to back out of their subsidies until the war is over. Can they afford to do this? Yes. If disk sales continue to rise, studios and other hardware manufacturers will cut them some slack.
The consumer will pay more (at least for longer than otherwise) if there is only one format on the field. I believe that price/performance is still the critical part of this whole competition. Public adoption will be delayed considerably when or if blu-ray wins exclusivity.
The wild card in all of this is the sales number for HD-A2 and HD-XA2. The A2 still is the fifth best-selling DVD player at Amazon:http://www.amazon.com/gp/bestsellers...016770-5119945
That is very remarkable for a "niche" product. Even more remarkable is the XA2 in sixteenth place -- a very expensive item for a ranking that high in sales. Just note the "bargain" players all around it.
The A2 sales figures and the attach rate of HD DVDs will be important statistics to add to the mix. One issue with less expensive players, however, is the purchasers are more likely to rent, rather than buy HD DVDs. In that case, the "disk sales war" will not reflect actual use. Of course, studios are more interested in sales than rentals.
If Toshiba's HDTV with player promo falls flat and if sales of the A2 slip, then I think Toshiba has few good cards left in its hand. In that event, the inexpensive Chinese players may never appear in any great quantity. But those are big "ifs."