This isn't about Sony versus Microsoft. This is about Sony versus Toshiba
The theory goes that Sony's play is not for the next generation games market at all. Microsoft's Xbox 360 is no more than an irritating diversion. The big play is for the high definition DVD market, and in this context, an early launch, with small hardware numbers and threadbare games software support might just be a good move.
This play potentially represents Sony's most important move in its entire history. Imagine; a royalty for Sony on every single DVD sold between 2006 and 2012 or thereabouts. No wonder Bill Gates hates Blu-ray.
The next generation DVD market is much, much bigger than the next generation games market. Owning the high definition DVD platform through Blu-Ray is Sony's number one priority for the next two years. Coming first in the next generation games market tags along for the ride.
The enemy is Toshiba
This spring, Toshiba will launch HD-DVD. Small numbers of ultra-high early adopters will be asked to pay up to $800 for the machine. But they will be nervous about making that commitment, if they see that Blu-ray is already available at a lower price, backed by Sony, albeit in savagely small numbers.
Here is where the first scuffles over the future of home entertainment will take place. It's important to draw first blood.
That's reason one. Reason two is Hollywood. This fall, the studios will be making a call on which formats to back. If Sony says, "We're launching PS3 at Thanksgiving with a million units," Hollywood will say, "Okay, great."
But Sony might be in a position to say, "We launched PS3 earlier this year, and they're still lining up around the block. We've sold 300,000 units, and we're now shifting 30,000 a week. We plan to sell another million over the holidays. Blu-ray is here." Many of the studios have made verbal commitments to Blu-ray, but that's a long way short of backing the platform with the high definition DVD versions of its summer movies.
Hollywood does not want a split format. It will do as much as it can to avoid this scenario. What it needs to see are numbers.
Michael Pachter, analyst at Wedbush Morgan Securities says, "A lot of people in the games media are missing the picture here. This isn't about Sony versus Microsoft. This is about Sony versus Toshiba. Everything Sony does regarding PlayStation 3 is colored by that fact."
The cultural card
There are those who argue that Sony would never launch in America before Japan, for cultural reasons. They may be right. But they would never have predicted a Welshman at the head of Sony. And Sony is ultimately going to do what's right for its business.
Where is the DVD market of the future. In Japan? No. It's in America. That's where the platform war will be won or lost.
Then there's the price. Pachter again, "Sony can lose $100 per unit for the first 20 million units, and it still makes a lot of sense. Let's say that costs $2 billion. In a few years, the royalties from high definition DVDs could be as high as $2 billion every year."
And if Sony's main concern is the high def DVD market, rather than Xbox 360, a slightly higher price might be bearable. Put it this way; if you're a games-platform-agnostic high-def TV owner in 2006, or 2007, PlayStation 3 looks like a bargain, even at $500.
But this is the bottom line
All of this is speculation. We have no idea what Sony is really up to. Sony has been super-tight-lipped about its plans. But there's a lot of received wisdom out there that ought to be challenged. Sony's real platform wars are with Toshiba; not Microsoft.
Sony has been locked tight in its trenches these past few months. Maybe it's been sitting quietly, waiting for everything to fall into place. Or maybe, its sappers have been busily digging a bloody great hole underneath all of us
Reply With Quote
Originally Posted by EvilBoB
Social Networking Bookmarks