Sony Pushes Blu-Ray Adoption With PS3 - Page 2  

******** is, well, dead meat. The one thing I got from this article is that, sadly, the PS3 apparently won't be launched until Q4. So the idea of our first blu-ray player being the PS3, launched in June, isn't likely to happen.

As I understand it, the PS3 being released in Japan in March won't necessarily play blu-ray discs, because the format won't likely be ready, but the units will be upgradeable.

So will their be stand-alone Blu-ray players next summer?

And, when will Toshiba have cheap Chinese HD DVD players available?

Regardless, neither really matters, as the HD disc format won't be adopted quickly by the consumer. I still think Sony is the likely winner in this war, due to PS3 which will sell in huge quantities. Only the loss of a studio can really hurt Sony. Of course Microsoft is working hard to make that happen.

SACD & DVD-A died not because of competition ... because they never offered a compelling reason to upgrade. Better quality on audiphile grade systems is not a compelling reason for J6P.

People chose compressed low-fi format like Mp3 instead for its convinience.

So, if HD-DVD/BD become niche formats it won't be because of competition between them, but because J6P decides there is no compelling reason to upgrade from DVDs.

That's something already well known.

US BR-ROM itself won't be ready for launch until November 2006 anyway, so you can start saving your money toward the PSX3 as your first BR-ROM player.

Exactly.

Nope.

Summer 2006. Since Toshiba gave Chinese all the source code and a reference design, it will take them 6 months to produce the first HD-DVD players.

Consumer adoptation depends on how fast HD-DVD player price drops. At $199 and below, an HD-DVD player becomes a mass-market item and sales will really take off.

Well, the videogame industry doesn't think so, and this is why you see even long time SCEI allies like Namco and Square announcing titles for Xbox 360. The overall hardware/development environment/cost structure package Microsoft put together is simply unbeatable and Microsoft is well on its way to dominate the 5th gen console market. SCEI's last hope is to defend Japan from Microsoft assault.

Yea, Amir and HP executives joined hand in hand, according to Japanese sources...

Disregarding video quality, the quick transition to HD-DVD has one significant benefit for Hollywood studios; better content protection via AACS. MMC and network streaming or not, AACS is far more secure than CSS and it is in studio's best interest to migrate to HD-DVD ASAP.

And then you fell off the bed and woke up? ;)

The Core System's price is $300, not $200.

The latest launch title lists for both systems list about 30 games apiece.

A $500 PS3 shipping in a year is Microsoft and Nintendo's wet dream, not stated fact.

Careful, too much spinning is likely to make you puke eventually ;)

IANAL, but I have read more case law on pricing than most (occupational hazard), and there are some "rules of the road" when it comes to pricing from what paid counsel I have gotten has told me, so let's at least set the boundaries of the dispute properly before rushing to get attorneys to settle the finer points:

1) There are consumer protection laws that can apply with respect to pricing (e.g., in Texas it is illegal to charge someone more to use a credit card - but you can give a cash discount) at the State level.

2) The Commerce Clause of the Constitution generally puts anti-trust at the Federal level first. The key pieces of federal legislation are the Sherman Act and the Clayton Act. The Microsoft suits brought by the States were civil suits brought under Federal, rather than State, law, IIRC. Hence why they were handled by a single Federal judge.

3) Some pieces of AT law are actually at odds with the underlying anti-trust philosophy (CONSUMER protection) and are no longer actively enforced by authorities (e.g., Robinson-Patman). However, private entities still sue under these statutes (e.g., Robinson-Patman) with mixed success.

4) Predatory Pricing does not apply to new categories of products definitionally. If there was a competitor to be harmed in that category, then it would not be "new". Innovation generally trumps substitute product harm (i.e., products that are not generally directly competitive), but you would need multiple $1,000/hr. lawyers to tell you definitively for specific cases.

5) The definition of below AVC/MC (which should be different for physical goods) is closer to the definition of "Dumping", rather than predatory pricing. They seem like the same thing, but they are not. Dumping is an international trade issue and has a much lower evidentiary bar than predatory pricing since it goes before an administrative law panel.

6) So, textbook predatory pricing case? Who is the injured party? Neither product has been released, and established business patterns alone will generally give them more than sufficient legal cover. Now, if the PS3 did drive MSFT to have to kill the Xbox 360, and then Sony raised prices on the PS3, then, adn really only then, would you have a predatory pricing case.

Later,
Bill

We are talking November 2006, not a couple weeks from now.

Which leads us back to your assumption that the Nov. '06 date is set in stone, when it's just a best-case scenario for MS and Nintendo.

Assuming the best possible conditions while making plans is never a good idea.

The interesting point is that I'd buy a PS3 to play high-deifnition movies, but not to play games. Conversely, I'd not buy the X360 to play movies but do plan on buying it to play games.

I know, rodents are illogical, just like all consumers. :)

No Toshiba won't. Adding HD-DVD drive to Xbox 360 at this point doesn't make sense because suppliers(Be it Toshiba or Chinese) cannot meet Microsoft's quantity(at least a million units per month) and price(Under $100) requirement.

Likewise, the PSX3 launch too will be hampered because of the BR-ROM drive availability problem even if Sony is willing to eat $250/unit cost hit.

Bill, thanks for that brief law overview, interesting stuff.


I know, but since that it is slightly off-topic, I said:

Two competing formats were definitely part of the reason both SACD and DVD-A faltered. It split the industry, causing consumers to choose a limited selection of titles based on format choice. By the time universal players became cost effective, both formats were on the decline and MP3 was becoming mainstream. Content protection (no free ripping allow), and lack of a digital connection in cheap receivers were other reasons DVD-A and SACD failed.

I feel two competing formats will be a factor in the success of next generation discs, unless: 1. Universal players were sold economically early after both formats launched. 2. HD-DVD or BD dropped support shortly after launch. Having two formats may confuse J6P, which in addition to the perceived "marginal" improvement over DVD, could add another reason to not buy into either format. Also, as other threads pointed out, retailers do not want to stock both formats. If you think about it, why would DVD Forum and BD Group (mostly just Sony & Toshiba though) meet on several occasions to unify the formats if they did not fear competing formats could cause both to fail?

********GA,

$200 is speculative pricing; nobody knows what Xbox360 will sell for in Q4 2006. It will be less than $300, but that's all we know for now. I can understand why you keep bringing up the Xbox360. It will not offer a HD-DVD drive in the near future, but can affect the sales of PS3. If you listened to the Oct. 17th AVS Radio Show, the guest that day was Andy Parson, a V.P. at Pioneer and Spokesperson for the Blu-Ray Disc Association. In that interview, he said that three seperate analysts predicted anywhere from four to seven million PS3's would be sold in the first year it is available. Let's say Xbox360's new pricing in Q4 2006 cuts 15% off of the lowest PS3 estimate, 4 million. So by Q4 2007, HD-DVD players sold and PS3's/BD players sold may look like this (I'm being optimistic for standalone BD and HD-DVD players):

HD-DVD:??? 1,000,000 players
BD: ??? 500,000 players
PS3: 3,400,000 players

So really, even if Xbox360 takes some market share away from PS3, it will not be nearly enough to even out the number of players sold for both Hi-Def formats. Because of this, the Xbox360 is a non-factor in the format wars.

Lyman4242

BR-ROM drive itself is the limiting factor of PSX3's market availability; since Sony cannot build no more than 100~200K BR-ROM drives per month, that's how many PSX3s will be shipped to the retailers. At such low availability, it will sell out regardless of MSRP and there is no incentive for SCEI to lose much money on each PSX3 sold.

We do know that it costs Sony anywhere from $500(merrill lynch) to $600(My estimation) to put together a PSX3. Now, how many units can SCEI sell with an MSRP of $500? Practically everything they can build, which is around ~200K units/month to supply both Japan and US markets. By then Xbox 360's production would has passed 1 million/month mark.

Just do a math. SCEI is starting late, the production starts low and rises more slowly, costs more to build and the cost is not dropping as quickly as its competitor. Now, how is PSX3 supposed to beat Xbox 360? It can't.

For the same reason HD-DVD's victory in the market is assured; it is launching early, is much cheaper and simpler to build, the price drops faster thanks to Chinese venders. By the time BR-ROM launches, HD-DVD has already become an affordable mass-market item. Therefore it is not possible for BR-ROM to overtake HD-DVD, it's that simple.

Very, very famous last words.

skogan:

1) considering that none of the formats are out, that it is a format and that there is tons of formats out there (VHS, DVD, UMD....) I doubt you can say BR wants to be a monopoly.

2) even if they had 100% of the market, Sony will have to put some kind of media drive in its device, there is no law that says what that media must be.

a) it makes sense to add just one (for compatibility reasons, look at the article that said even if the 360 eventually gets a next generation drive it will never be used for games)

b) you would not only need to prove it was a dumb choice ( no games ever come out on BR) but also that there was intent (BR was added only to win the war and could not be used for games and Sony new that)

********, where do you keep getting your figures and estimates from? This is because some of them are wrong and some of them are literally unbelievable.


********, your estimate is to say the least questionable while at least Merrill Lynch tried to explain how they got to their estimate of $495.

Yeah, what Richard Paul said. :p
Seriously though, could you please explain where you get the 100k-200k BD-Rom drive production number from?


I believe other people, including myself, have already covered this. It does not matter what it costs Sony, it just matters what they sell it for. Since all last generation consoles were sold for a loss or no profit, Sony may very likely sell the PS3 for less than $500 (like maybe $400 as is rumoured).

You are forgetting one important factor in both cases: content. Just because a product is launched earlier than a competing product is no guarantee that it will be a success. If you remember, Dreamcast launched well before PS2 and Xbox. Guess what happened, not enough popular Dreamcast titles were available in time for the Sony PS2 marketing machine to pull into full force and cut the rug out from Sega. People waited to see what the PS2 would offer, and the Dreamcast slowly lost support (there may have also been issues of rampant Dreamcast piracy, but that's for another day :) ).

The same thing could happen for HD-DVD or Xbox360. If either of them do not produce enough popular content, the PS3 or BD will have the potential to overcome them with marketing. The PS3 will promote great games that people are waiting for, while studios will announce BD-only popular titles that people want to buy. This could hold some people off from buying an Xbox360 until they see what the PS3 has to offer. Similarily, some people may hold off from buying an HD-DVD player until they see what movies are actually released on BD. In my opinion, if people want something -like a certain game or movie- and they are made aware of when it will be available, there is good chance they will wait for it. So, an early launch is good for HD-DVD only if they can follow through with good solid content from the start; enough content that people won't wait for the BD only content.

From Nichia press release. ( http://www.compoundsemiconductor.net.../news/8/10/6/1 )

Nichia's blue laser diode production capacity is 250K per month. Since Nichia has to allocate its production to all its major customers equally to not offend anybody, Sony only gets a share of Nichia's 250K monthly production like everybody else. Blue laser diode will be in tight supply for the first couple of years, and the production level of PSX3 will be limited by the number of diodes that Sony can source, which isn't a lot. Even if Sony's inhouse blue laser diode production line with fab tech licensed from Nichia goes up, it won't exceed Nichia's capacity, and this is how I came up with my 200K BR-ROM drives per month maximum estimation for the first couple of years.

As for the PSX3's BOM analysis, I do my own and I know quite a lot more about Toshiba's fab process yield and BR-ROM drive cost than these financial institution's "analysts" do.

SUrely it does, since Sony is in a very weak financial situation and is laying off tens of thousands of people. Sony does not have the financial resources to take a hit on PSX3's launch this time around.

Times have changed. When PSX2 launched, PSX was still generating $500 million a year profit, so SCEI could redirect those profits to subsidize PSX2 losses. Not this time around, when SCEI is already losing money and just took a $2 billion loan to finance CELL project. There is no money for SCEI to finance PSX3 subsidy.

Which is actually Xbox 360's strength and PSX3's weakness. 200 titles are in development for Xbox 360 while only half as many are in planning stage of PSX3.

Well, your analogy of Dreamcast launch to Xbox 360 launch is invalid because Xbox 360 has one thing that neither Sega nor SCEI has; money and lots of it.

IBM's Xbox 360 CPU project began two years after CELL yet Xbox 360 is launching almost 6 months ahead of PSX3; how could this happen? Simple, Microsoft paid a lot of money to accelerate the project, so IBM assigned twice as many engineers on XCPU2 than it did on CELL. Microsoft is airfreighting all of launch units straight out of factory to meet the November deadline, while SCEI has no choice but to seafreight which adds 2.5 months to launch. Had Xbox 360 been a Sony product, then the earliest possible date of launch is November 2006, but the power of Microsoft's unlimited money shaved 1 year off from Xbox 360's launch date.

PSX3 has to fight for its own survival against Xbox 360 onslaught.

So that tells me you are not from gaming background.

Only from Fox and Sony/MGM. If you are into Stealth and the rest of Sony's flops, be my guest.

The pricing difference guarantees that won't happen, as Xbox 360 would have reached half the price of PSX3 at any given time frame until 2008. If the pricing is similar, then that could be true. But we are talking about $200 Xbox 360 core system Vs $500 PSX3 in November 2006.

Then purchase HD-DVD players since HD-DVD selection is greater, players are much much cheaper, and there are no differences in video quality. And HD-DVD got porns, while Sony refuses to subsidize BR-ROM porns.

You have too much faith in so-called BR-ROM only content.

Such unimaginable hatred. What is with the continued insistence on calling Sony's console PSX3? Is that out of pure ignorance, or a desperate mud-slinging attempt to associate the upcoming console with the previous PSX recorder?

********, you might want to note that Nichia is only one of several companies producing blue laser diodes and their are others that are doing so as well. As such aren't you vastly underestimating the number of blue laser diodes that will be available next year?


Considering that you keep misspelling PS3 that is somewhat hard to believe. ********, you are either doing so because you don't actually know how to spell PS3 or because you hate Sony so much that you have to attack them in every post.


Because the CELL CPU is radically different from your average CPU and as such it took longer to make?


********, I take it you are not a fan of X-men or Spiderman since you seem to conveniently forget about the good movies that Fox and Sony have made. Also let's not forget that 5 of the 6 major studios now support Blu-ray which is a good indication of which format will most likely win.


********, besides being complete nonsense this statement says almost to much about the one who posts it.

Excuse me but can you link me to article saying that the xbox 360 is expected to beat the ps3 by a wide margin? That really is a ridiculous statement. The ps3 has won these past 2 game generations easily and you suddenly expect sony to go down in flames next gen? I know you are a big xbox fan but really you can't really expect xbox 360 to dominate next gen. The playstation brand is really the only one casual gamers know similar to how people equate ipods with mp3 players nowadays.

Not even the official XBox magazine would print such a ridiculously sycophantic statement :D

PS-- Folks, I think ******** calls the console the "PSX3" because "PSX" was the original Playstation's code name while it was in development, and it went on to become that console's nickname among gamers.

It is not a hatred; it is called a fact.

To distinguish between PS(PlayStation, the SuperNES CD System) and PSX(PlayStation-eXtension. PlayStation series as you know them today).

Nichia holds the blue-laser patents and is the biggest supplier of blue-laser diodes. Since Nichia can produce only about 250K diodes per months, its licensees, namely Sony, cannot do better than Nichia. So I am not underestimating.

XCPU2's core design takes from CELL's PPE CPU and enhances it with dual integer units and a new VMX unit. As I understand, XCPU2 taped out a couple months after CELL DD2, yet Microsoft's money has greatly accelerated the verification and production phase, so this is why Xbox 360 is coming out 6 months before PSX3.

Well, Nintendo controlled 90% of global markets for 2 game generations before suddenly going down in 3rd gen. Make one wrong move and you are screwed. Nintendo screwed N64 up with its difficult & expensive development environment and high media cost that alienated developers. SCEI has exactly same problem of Nintendo64, plus the ultra-high system cost of Saturn.

In case you don't understand why developers are abandoning PSX3 and migrating to Xbox 360, a couple of charts from a Sony second-party developer illustrates this problem.

http://i5.photobucket.com/albums/y185/striek/ndgif.gif
http://i5.photobucket.com/albums/y18...ndsalesgif.gif
Notice that the development cost skyrocketed in PSX3 generation. The cost of entry is $18 million just setting up the development environment excluding actual development cost. This is why there are so few titles in development for PSX3. Developer migration to Xbox 360, where the cost is much lower and Microsoft actually subsidizes a good portion, or 100% for selected titles, of development cost is not a matter of choice or preference, but survival.

This is not a console forum and I do not want to debate it anymore. However, do remember that PSX3 is destined to ultimately lose to Xbox 360 and is basically a non-factor in HD disc format race. BR-ROM has to stand on its merits but you and I know it can't.

There is a falisy in all of the logic going into the benefits of the PS3 having a BR-DVD drive. This is not really for the consumer impact, but to molify the studios that there will be an installed base they can sell into and thus getting them behind the format in favor over HD-DVD. The push, and relative success, of video for the PSP has helped in this area a lot. Sony can point to how they created a new format which is generating revenue (if not yet profits) for the studios, and doing it at a higher price point than traditional DVDs. (Who would believe they would get $20 for a low-res, non-recordable, no video out version of a movie which is simultaneously available on DVD?)

In the end run, let's look at the market. The PS3 will be as good a BR player as the PS2 is a DVD player. Since everyone who will want to watch content from BR will have an HDTV, then let's assume a more sophisticated market with some money to spend. Expect the PS3 to be a mediocre to poor player (as is the PS2), and that a decent BR only player will be a few hundred more initially. Ergo those purchasing the PS3 for BR playback primarily will be:

1) Overseas where the PS2 made great inroads as a DVD player before a game system.
2) People taking their first tentative steps into BR-DVD, but are game players first.
3) People interested in a second BR player (perhaps for the kids HDTV).

These are not really driving consumer forces. I fully don't expect either HD-DVD or BR-DVD to take off as consumer formats. DVD will be with us for a great while longer, especially as devices like the iPod Video make consumers WANT to rip their video content for portability.

It will take several years, if ever, for these new formats to truly take off. In the end run, Microsoft made the right choice to go with standard DVD as their format. It is proven, reliable, available and gives them a significant advantage in cost and time to getting a system to market.

If the fury over formats does not die down soon, the PS3 will have trouble shipping with a BR drive which is completely compatible with the final specs (which are not yet complete). This would be a disaster for Sony, and is one which they are working hard to avoid at all costs.

agree, and that was why a few months ago I had said that the studios would go BR only after the PS3 proved itself. I did not think Warner and Paramount would react this fast. I guess part of it is pressure from the bosses and shareholders. Even though it is a hasty conclusion it is not 100% unfounded and like you said, the PSP is a prime example to make the case for the PS3.

agree the thing is 2 can end up being extremely important. It is the free sample table at the super market "I have a PS3, there are these 20$-25$ BR disks, I would buy the movie, let's see what it can do" that can help with the next generation market. No need to buy a next generation player. Now I think if the PS3 is not as good as a stand alone it could also help with driving a secondary stand alone market. Try BR because you spent the $ for a PS3. next generation wow factor, buy next generation player.

agree

Partly agree in that I think it will take quite a push from either format to make them successful. I feel most consumers don't know how to rip DVD's, so if HD-DVD or BD made ripping video to a computer easy (via MMC), Ipod and other portable video player owners could migrate to either format faster.


********, almost every post you have made on this thread has tried to parrallel the potential failure of the PS3 with the potenital failure of BD, all because of Xbox360. Regardless of which format wins, HD-DVD or BD, it will not be because of Xbox360. There has been no Xbox360 sold, no HD-DVD player sold, no BD player sold, no PS3 sold. There is analysts, stats, charts, graphs, industry experts, etc. that push for a certain format to win for whatever reason. You will find positive and negative information on both formats and both consoles. The point is that right now it is speculation as to which format and which console could win; it's speculation and part persuasion that fuels some of these posts on which format should win. To claim that a format and console have already won before any have even entered the market is, in my opinion, foolish.

Why bother debating with a person who is so blindly opposed to the PS3...it's a waste of time.

1) no comment.

2) States alleged violations of federal and state antitrust law. A single federal judge can hear the pendant state law claims under supplemental jurisdiction. State antitrust law is not preempted by federal antitrust law under Arc America.

3) FTC has the exclusive jurisdiction to enforce the Robinson-Patman Act

4) a plaintiff needs to show market power exercised by the defendant in the relevant product market in a predatory pricing case.

5) no comment.

6) the relevant product market for gaming consoles that also play movies already exists; see comment #4.

edited to correct spelling...

********, since the project to make an add-on for the SNES was cancelled, which was literally the biggest mistake Nintendo ever made, isn't it just a tad strange to keep using PSX as a term? I mean seriously you are the only person I know of that won't call the PS3 by it's actual name.


Being the biggest producer, which Nichia might not actually be, does not mean that you produce the majority of a product. For instance what happens if the other companies that make blue laser diodes produce a total of four times the number that Nichia can produce? If so than we would be talking about 2.5 million blue laser diodes per month. To ignore all other blue laser diode manufacturers is to make any estimate on PS3 production completely worthless.


That somewhat ignores the 7 SPE units which can significantly outdo the Xbox 360 CPU in certains tasks such as physics.


********, their are some major mistakes with those two charts besides the fact that their are signs of bias as well. The bias is easily seen in the guess for making a PS3 game and a major mistake is seen in the wording for the second chart.


********, no offense but you have some serious issues with Sony if you actually have such hatred of them. Personally I could see the Xbox 360 gaining market share but most likely the PS3 will be the top selling console for the next generation. As for Blu-ray I personally think it can easily stand on it's own and at the moment most of the studios seem to prefer it.

They also said Sony is expected to lose one billion dollars in the first year. Using their numbers that means Sony will sell over ten million consoles in the first year. So why should we believe you when you say they can only deliver less than 200,000 per month. A figure which the link you provided did not supply by the way. I think you are a shill and not a very good one at that.

The other major diode producers, Matsushita, Toshiba, Sanyo, and NEC, don't have enough for their own consumption and diodes they produce might not be compatible with Sony's OPUs.

Sony isn't the only vender with a big thirst for blue laser diodes.

[quote]That somewhat ignores the 7 SPE units which can significantly outdo the Xbox 360 CPU in certains tasks such as physics.[/quote
I can tell you have zero background in programming by your comment. You don't know what you are talking about.

You do know that Naughty Dog is a long-time exclusive Sony second party developer, right? When Naughty Dog and Square(gasp) complain, then SCEI really does have a big problem.

This is why I have a better analysis than merrill lynch.