Sony using PS3 to drive the BD format: Bad move - AVS Forum
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post #1 of 105 Old 01-12-2007, 04:33 AM - Thread Starter
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For several reasons:

1. Sony is subsidizing the PS3, losing between $200-$300 on every unit. It's intentions are to make back the losses on game sales/licensing. But if a majority of people are buying a PS3 to watch movies, game sales will be low in comparison to the number of systems sold. This will deter game companies from making more PS3 games (which are difficult to program for anyway).

2. A PS3 is much more expensive to make than a stand alone, considering it does everything a stand alone does, but includes a large hard drive, wireless controller, blue tooth, that crazy cell processor, etc. If Sony can make a PS3 for $700-800, why can't they make a stand alone for less than $500? If it's so important for Blu-Ray to succeed, why are they releasing players with huge profit margins? I think the huge profit margins is the real reason BD got all the CE support. If Sony left BD off of the PS3, they could've released it at the same price at an X-BOX360 and sell 2 to 3 times as many units. Then, they could've released a stand alone player for $500 and a PS3 BD add on for $200. - Had they gone with this strategy, I think BD would've already won the war.

I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales. I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.

Doesn't Sony also get money from every BD movie sale? If they are subsidizing the PS3 to eventually make back its money on game sales, why doesn't the same logic apply to stand alone players and movies?

David
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post #2 of 105 Old 01-12-2007, 04:40 AM
 
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Sony's stock is up.
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post #3 of 105 Old 01-12-2007, 05:38 AM
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Manufacturing costs will quickly drop and I am sure they have a break even point in the near future. Remember Sony was 2nd to market in game consoles and BD, so they could not afford to skim, taking early profits from early adopters, so they have taken a cost projection, based on volumes and time, and have priced it so that in the long term, they will be profitable. Of course this also means that I don't think you will see the price of PS3 reduce for a very long time, while Microsoft may have some room to drop their prices.
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post #4 of 105 Old 01-12-2007, 05:49 AM
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Quote:
Originally Posted by VAHOBACO View Post

For several reasons:

1. Sony is subsidizing the PS3, losing between $200-$300 on every unit. It's intentions are to make back the losses on game sales/licensing. But if a majority of people are buying a PS3 to watch movies, game sales will be low in comparison to the number of systems sold. This will deter game companies from making more PS3 games (which are difficult to program for anyway).

2. A PS3 is much more expensive to make than a stand alone, considering it does everything a stand alone does, but includes a large hard drive, wireless controller, blue tooth, that crazy cell processor, etc. If Sony can make a PS3 for $700-800, why can't they make a stand alone for less than $500? If it's so important for Blu-Ray to succeed, why are they releasing players with huge profit margins? I think the huge profit margins is the real reason BD got all the CE support. If Sony left BD off of the PS3, they could've released it at the same price at an X-BOX360 and sell 2 to 3 times as many units. Then, they could've released a stand alone player for $500 and a PS3 BD add on for $200. - Had they gone with this strategy, I think BD would've already won the war.

I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales. I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.

Doesn't Sony also get money from every BD movie sale? If they are subsidizing the PS3 to eventually make back its money on game sales, why doesn't the same logic apply to stand alone players and movies?

David


I believe, I believe....I believe you don't know what your talking about. "Sony lost $200-300 on me and will never make it back on game sales" Let me explain why companies are quick to lose $$ on hardware consoles. The more consoles that are made, the more publishers will make software for that console,in turn the more software that is sold, the more money the console manufacture will make...M$,Nintendo and yes,Sony all make a certian % on each game sold.It's around $7.00 a game or so out of the $59.95 they get for each game sold.So you see,this is why companies don't mind losing money on consoles,they make it up through accessories and games...it's called back-end marketing,this is where the money is.
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post #5 of 105 Old 01-12-2007, 05:57 AM
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Quote:
Originally Posted by VAHOBACO View Post

1. Sony is subsidizing the PS3

Thohiba did (is doing?) the same with their HD-DVD players
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2. A PS3 is much more expensive to make than a stand alone

Today maybe, but down the line Sony will make money when they sell one.
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I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales.

You made their launch look better (very important) and lets see how many games you have in a few years..
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I truly believe that Toshiba never subsidized the HD-A1.

They sold a complete PC with a HD-DVD + special hardware for audio etc for 499$, doesn´t sound like awesome profits to me..
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Doesn't Sony also get money from every BD movie sale?

All in the BluRay camp gets money, not just Sony.

If BluRay becomes the standard HiDef format it´s a move that will produce profits from here and the next 15+ years. At the same time the price for making Discs with PS3 games will be reduced thanks to the large volumes of BluRay Movies.

Love!
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post #6 of 105 Old 01-12-2007, 06:01 AM
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Quote:
Originally Posted by Shuley View Post

I believe, I believe....I believe you don't know what your talking about. "Sony lost $200-300 on me and will never make it back on game sales" Let me explain why companies are quick to lose $$ on hardware consoles. The more consoles that are made, the more publishers will make software for that console,in turn the more software that is sold, the more money the console manufacture will make...M$,Nintendo and yes,Sony all make a certian % on each game sold.It's around $7.00 a game or so out of the $59.95 they get for each game sold.So you see,this is why companies don't mind losing money on consoles,they make it up through accessories and games...it's called back-end marketing,this is where the money is.

I believe, I believe....I believe you don't read vs skimming through what he said. You just made his point. After all that giberjab about how much the companies make he stated he is not going to be buying the games for the system. His PS3 is only for movies only. Are we on the same page now.

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post #7 of 105 Old 01-12-2007, 06:18 AM
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I bought the PS3 to watch Blu Ray movies on.

If I ever buy a game it will likely be at the goodwill or salvation army. (It may take several years.)

It's working out great for me and I bet it's working great for Sony too, I've bought 6 Blu Ray movies thus far and I rented 3.

-Brian
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post #8 of 105 Old 01-12-2007, 06:26 AM
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Keep in mind that there is also a FULL PS2 inside the PS3 right now. Prices will drop once they figure out the emulation and would not have to include the extra hardware.
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post #9 of 105 Old 01-12-2007, 06:44 AM
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Anyone have any theories on why so many enthusiasts think they're marketing experts?
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post #10 of 105 Old 01-12-2007, 06:58 AM
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I too got my PS3 mainly for Blu-Ray movie playback but I did go out and buy RFOM and I also got 3 additional PS3 games for Xmas (all at full retail price) so Sony has already gotten back their subsidy from my purchase (and I am sure that they will do likewise eventually from the vast majority of early adopters like myself)...

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post #11 of 105 Old 01-12-2007, 07:12 AM
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If you don't think that the Blu Ray association (sony gets a big cut of that) will be making bucks off of the licensing of the Blu Ray movies, think again.

If Blu Ray wins (which I think they will) they will be reaping the benefits of your purchase for many many years.
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post #12 of 105 Old 01-12-2007, 07:47 AM
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Sure quite a few people have purchased the PS3 for Blu-ray movie playback, but once standalone players prices drop and better performing players appear, the PS3 for movie playback will end.

I for one purchased the PS3 due to the strong reviews for Blu-ray and of course the price, but once standalone players prices drop and performance increase I will be purchasing one.
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post #13 of 105 Old 01-12-2007, 07:53 AM
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Quote:
Originally Posted by VAHOBACO View Post

For several reasons:

1. Sony is subsidizing the PS3, losing between $200-$300 on every unit. It's intentions are to make back the losses on game sales/licensing. But if a majority of people are buying a PS3 to watch movies, game sales will be low in comparison to the number of systems sold. This will deter game companies from making more PS3 games (which are difficult to program for anyway).

2. A PS3 is much more expensive to make than a stand alone, considering it does everything a stand alone does, but includes a large hard drive, wireless controller, blue tooth, that crazy cell processor, etc. If Sony can make a PS3 for $700-800, why can't they make a stand alone for less than $500? If it's so important for Blu-Ray to succeed, why are they releasing players with huge profit margins? I think the huge profit margins is the real reason BD got all the CE support. If Sony left BD off of the PS3, they could've released it at the same price at an X-BOX360 and sell 2 to 3 times as many units. Then, they could've released a stand alone player for $500 and a PS3 BD add on for $200. - Had they gone with this strategy, I think BD would've already won the war.

I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales. I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.

Doesn't Sony also get money from every BD movie sale? If they are subsidizing the PS3 to eventually make back its money on game sales, why doesn't the same logic apply to stand alone players and movies?

David

Sony is able to subsidize the losses on the PS3 because the PS2 still earns Sony close to $2B a year and will continue to do so until the year 2010. There is an article in Business Week that came out two weeks ago regarding this. PS2 has sold over 110 million machines. Sony nets about $8 per PS2 machine and receives licensing fees of close to $1.8 billion a year on the PS2.

Stock analyst projects that the PS2 will remain the number 1 selling console until the year 2009. This is why Sony can afford to lose $200 -300 per PS3.

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post #14 of 105 Old 01-12-2007, 08:29 AM
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Building a user base for a new format is a tricky proposition. There's the typical chicken-and-egg game where content developers wait for an installed base and consumers wait for content.

Including Blu-ray in the PS3 helps tremendously to jump-start the process of building an installed base. Selling early units at a loss is typical of Sony's strategy with their consoles (the PS2 was much the same) because they'll be producing the same basic design for the next ten years, giving plenty of time for cost reduction. Since the bulk of sales occur later in the console's life, selling units through the middle and end of its life for even $25 profit can counterbalance the $200-$300 loss up front.

The cost of virtually everything in the system will drop dramatically over time, and the Blu-ray drive is no exception. The one part that had me confused is the hard drive. Typically, hard drives don't get cheaper to make over time - they just get higher capacities. I think Sony has two options there: embrace the need for high-capacity drives with game/movie downloads, or go solid-state in a few years. The latter option is actually starting to look viable.
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post #15 of 105 Old 01-12-2007, 08:40 AM
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Quote:
Originally Posted by mboojigga View Post

I believe, I believe....I believe you don't read vs skimming through what he said. You just made his point. After all that giberjab about how much the companies make he stated he is not going to be buying the games for the system. His PS3 is only for movies only. Are we on the same page now.

I think Sony is perfectly ok with you buying the PS3 *only* for Blu-ray. Heck, at this stage of the game, they probably prefer it since the format war is the one that needs to wrap up sooner. And the sooner they win that war, the more ok they'll be with having given you a subsidized player.

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Originally Posted by DarkAdept View Post

The cost of virtually everything in the system will drop dramatically over time, and the Blu-ray drive is no exception. The one part that had me confused is the hard drive. Typically, hard drives don't get cheaper to make over time - they just get higher capacities. I think Sony has two options there: embrace the need for high-capacity drives with game/movie downloads, or go solid-state in a few years. The latter option is actually starting to look viable.

Exactly, and on the storage front, I believe that both the standard HDD sizes will increase as time goes on, and they will evetually go solid-state as well, maybe with the release of the PSThree down the line.
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post #16 of 105 Old 01-12-2007, 08:41 AM
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Originally Posted by fa8362 View Post

Anyone have any theories on why so many enthusiasts think they're marketing experts?

My thoughts exactly.
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post #17 of 105 Old 01-12-2007, 08:44 AM
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Quote:
Originally Posted by DarkAdept View Post

The cost of virtually everything in the system will drop dramatically over time, and the Blu-ray drive is no exception. The one part that had me confused is the hard drive. Typically, hard drives don't get cheaper to make over time - they just get higher capacities. I think Sony has two options there: embrace the need for high-capacity drives with game/movie downloads, or go solid-state in a few years. The latter option is actually starting to look viable.

I think you hit the nail on the head with this one. Sony won't be taking a loss on this system for long as soon as they can manufacture blu-lasers in high enough quantity to meet demand. I believe that this could be part of the reason why they have adopted this trickle effect of introducing new PS3's to the market.

Is Sony taking a loss now? Yes. How long will they take a loss? Only they know. But something tells me that Sony has done a day or two to do some research about when it will become profitable.

I know they've already made some of their money back on an additional controller and the BD-remote from me. I have also downloaded Blast Factor for $8 or $9 and I have rented several games.

Chet
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post #18 of 105 Old 01-12-2007, 09:32 AM
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Quote:
Originally Posted by VAHOBACO View Post

I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales. I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.

Doesn't Sony also get money from every BD movie sale? If they are subsidizing the PS3 to eventually make back its money on game sales, why doesn't the same logic apply to stand alone players and movies?

David

I find it very touching to see how much you care about Sony's well-being. Don't worry, my friend, they will be fine. Instead of worrying, just get a couple of movies and enjoy watching them. That will surely help your and Sony's well-being.

In Blu-Ray Veritas!
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post #19 of 105 Old 01-12-2007, 09:55 AM
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Quote:
Originally Posted by fa8362 View Post

Anyone have any theories on why so many enthusiasts think they're marketing experts?

That one made me laugh. I do think a lot of AVS members probably do think they could do a genial job of running the BDA's marketing, but in practice I wouldn't say that's an entirely accurate statement.

As to the topic of the original post.....It is my personal opinion that without PS3 blu-ray would be dead in the water. Those 1000+ players simply would not do enough to halt the charge of HD DVD at $400 street price with 3 free movies. Whatever success blu-ray has had as of late, one has to attribute a large portion of that to PS3.

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post #20 of 105 Old 01-12-2007, 10:44 AM
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Quote:
Originally Posted by VAHOBACO View Post

For several reasons:
I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.
David

Congrats on your xcellently priced BD player. If you truly believe that Toshiba never subsidized the A1, you drank the red koolaid. They probably aren't subsidizing them now, and I expect the next gen BD players to be closer in price to Toshiba's current pricing strategy. The problem is that all of the G1 BD players shipped in the last 60-90 days (or less), so they can't very well replace all of them with $600 models just yet. By late summer this will be less of a problem.

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post #21 of 105 Old 01-12-2007, 11:01 AM
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How many times can we regurgitate the same old talking points over and over? I can probably pull a hundred threads from over a year ago that stated the exact arguments. I could pull thousands if you count the gaming forums.

Why do you care if Sony made a mistake? Why do you care if MS does great? Buy what you want. Support who you want, but please...pleeeeaaaase bring something new to the table.

It's getting to the point where I don't care what point people are trying to make. I actually hear Charlie Brown's teacher talking in my head when I read threads like this. And all that gets accomplished is a new addition to my already long ignore list. Chalk up one more!

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post #22 of 105 Old 01-12-2007, 11:08 AM
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Quote:
Originally Posted by VAHOBACO View Post

For several reasons:

1. Sony is subsidizing the PS3, losing between $200-$300 on every unit. It's intentions are to make back the losses on game sales/licensing. But if a majority of people are buying a PS3 to watch movies, game sales will be low in comparison to the number of systems sold. This will deter game companies from making more PS3 games (which are difficult to program for anyway).

2. A PS3 is much more expensive to make than a stand alone, considering it does everything a stand alone does, but includes a large hard drive, wireless controller, blue tooth, that crazy cell processor, etc. If Sony can make a PS3 for $700-800, why can't they make a stand alone for less than $500? If it's so important for Blu-Ray to succeed, why are they releasing players with huge profit margins? I think the huge profit margins is the real reason BD got all the CE support. If Sony left BD off of the PS3, they could've released it at the same price at an X-BOX360 and sell 2 to 3 times as many units. Then, they could've released a stand alone player for $500 and a PS3 BD add on for $200. - Had they gone with this strategy, I think BD would've already won the war.

I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales. I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.

Doesn't Sony also get money from every BD movie sale? If they are subsidizing the PS3 to eventually make back its money on game sales, why doesn't the same logic apply to stand alone players and movies?

David

Sony won the war because of the PS3. By producing millions of BD drives they have managed to substantially lower the cost of production. Same goes for BD discs.

And of course, they won the war.

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post #23 of 105 Old 01-12-2007, 11:12 AM
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Sony using PS3 to drive the BD format: Bad move

it's only bad for Sony, why do you care? Without PS3, there would not be a BD player you can buy right now fo $500.
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post #24 of 105 Old 01-12-2007, 11:22 AM
 
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Originally Posted by rupertoooo View Post

Sure quite a few people have purchased the PS3 for Blu-ray movie playback, but once standalone players prices drop and better performing players appear, the PS3 for movie playback will end.

I for one purchased the PS3 due to the strong reviews for Blu-ray and of course the price, but once standalone players prices drop and performance increase I will be purchasing one.

I'll continue to watch movies and play games on my PS3, Why? Simply because it rocks.. Awesome PQ and SQ. And it is dead silent

8 blu-ray movies, 2 fantastic games and several rental so far and I've had it barely over a month.

Without the PS3 I'd simply still be watching SD DVD's or the very limited selecton of HD movies on tv. Home entertainment has been so much better now the PS3 has arrived
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post #25 of 105 Old 01-12-2007, 11:35 AM
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Originally Posted by briankmonkey View Post

I'll continue to watch movies and play games on my PS3, Why? Simply because it rocks.. Awesome PQ and SQ. And it is dead silent

8 blu-ray movies, 2 fantastic games and several rental so far and I've had it barely over a month.

Without the PS3 I'd simply still be watching SD DVD's or the very limited selecton of HD movies on tv. Home entertainment has been so much better now the PS3 has arrived

I agree now just add a HD DVD player and you have it all...what format war?

Joe V.
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post #26 of 105 Old 01-12-2007, 12:02 PM
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Not a bad move. Sony loses money on consoles but promotes the BluRay technology even more. As time goes on, cost goes down, sony makes money.

Plus, for those of us that use the PS3 for gaming and movies, games will be more complex in the coming years and I like that fact that it will fit on one disc
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post #27 of 105 Old 01-12-2007, 12:18 PM
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Does no one else find it sad. That only 2 months after release and only 1 million sold world wide. The PS3's are already sitting on shelves not being sold out. The 360 were still selling out in this time period, even with its bad press. The Wii has sold more and is still as rare as a prom queen's cherry i the stores.

For the release of the gaming and multi-media future to already loose the steam it had its first 2 weeks of release is pretty bad.

Now, i'm not saying it will fail or BD will fail. Cause I honestly don't know. But it is quite a blunder to be this early into the release and not be able to sell 100% of the units of such a technological wonder(sarcasm).

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post #28 of 105 Old 01-12-2007, 12:24 PM
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Quote:
Originally Posted by SteroMAdMAn View Post

Does no one else find it sad. That only 2 months after release and only 1 million sold world wide. The PS3's are already sitting on shelves not being sold out. The 360 were still selling out in this time period, even with its bad press. The Wii has sold more and is still as rare as a prom queen's cherry i the stores.

For the release of the gaming and multi-media future to already loose the steam it had its first 2 weeks of release is pretty bad.

Now, i'm not saying it will fail or BD will fail. Cause I honestly don't know. But it is quite a blunder to be this early into the release and not be able to sell 100% of the units of such a technological wonder(sarcasm).

I watch movies and pay little attention to things that don't concern me. My player isn't going to stop working because some videogame system is or isn't selling out 7 weeks after launch.
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post #29 of 105 Old 01-12-2007, 12:29 PM
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Seems to me that the people that are the most concerned about the PS3 sales levels are the more extreme HD-DVD fanboys in this forum and they don't even want a PS3! Sad! Some of the more extreme HD-DVD fanboys have apparently even resorted to visiting their local stores to do stock checks of PS3s and standalone BD players. Sad!
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post #30 of 105 Old 01-12-2007, 01:07 PM
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Quote:
Originally Posted by fa8362 View Post

I watch movies and pay little attention to things that don't concern me. My player isn't going to stop working because some videogame system is or isn't selling out 7 weeks after launch.

Quote:
Originally Posted by WaldorfSalad View Post

Seems to me that the people that are the most concerned about the PS3 sales levels are the more extreme HD-DVD fanboys in this forum and they don't even want a PS3! Sad! Some of the more extreme HD-DVD fanboys have apparently even resorted to visiting their local stores to do stock checks of PS3s and standalone BD players. Sad!

Maybe you should re-read my post or get reading glasses. Cause I'm pretty sure my post had nothing to do with what either of you just said.

Boy, you BD folks sure get defensive. Blinded by the Blu side you are.

It is better to ask for forgiveness, than it is to ask for permissision - the WAF factor
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