jump to navigation

Playing Around w/ This Article November 1, 2007

Posted by hdanalysis in HD.

” How in the world does Sony think it’s ever going to make any money from the PS3 (Blu-ray format)? I mean, seriously.

You may have heard by now that Sony has made an announcement to effectively dump its PS3 (aka. Blu-ray player) starting this Friday for just $399.99. You may also have heard that North America followed suit from Europe and Japan. Supplies are limited, of course, until they announce a 120GB PS3 and the offer is apparently priced differently in different countries by dumping.

Wikipedia defines dumping as “the act of a manufacturer in one country exporting a product to another country at a price which is either below the price it charges in its home market or is below its costs of production.” Sony’s move isn’t really anti-competitive, because there are no U.S. manufacturers making PS3s. But it’s that “below its costs of production” part that applies in this case. The PS3 arrived in the States with an original MSRP of $599.99. Now, Sony is letting it go for just $399.99. There’s no way the player cost less than $400 to manufacture. Just. No. Way.  (More like cost $800 to manufacture.)

You might wonder: How can Sony possibly have enough PS3s left to sell at just $399.99 at large, nationwide retailers? Simple. It’s because they didn’t sell originally, so plenty of stores still have them sitting on shelves, gathering dust. Sony is eager to clear them all out at this point, and Wal-Mart and Best Buy are happy to help.

Clearly, the Blu-ray/PS3 camp understands that low price and Profile 1.1 are really the only card they have left to play in this format war. Porn hasn’t won the war for them as predicted, nor have online bells and whistles, or combo discs/players, nor have they finalized the specs of their players. The obvious question would be: Why in the world would any other hardware manufacturer want to join Sony’s foolhardy strategy of constantly changing specs every month? It’s no accident that although PS3 is outselling HD DVD player standalones at a 5:1 ratio (probably lower now) but only outselling software at a ratio of 1.85:1.(and no, BOGO offers should NOT count, but Sony still counts them). Given how dramatically Sony has slashed prices on PS3s over the last year, you have to wonder how long they can keep losing money.

Forget for a moment that the PS3 isn’t capable of promising Profile 1.1 compliant – that doesn’t matter. Why? Because no one will ever expect it to be and majority of PS3 owners are just Blu fanbois trying to troll and promote Blu-ray when they rarely watch movies at home.  Being gamers, they aren’t likely to want to pay $30 for an Blu-ray movie either. I’d bet many of the people who jump on this sale will either be using them primarily as a PS3 console, or they’re already diehard Blu-ray supporters and are buying them as just to try to help Sony boost sales. For those regular consumers who take the bait, I wonder how they’ll feel when they realize they can’t play those big Universal, Paramount, and Dreamwork titles in the “red” boxes due this holiday season.

 Okay, that’s enough fun.  Now I will just comment how lame this Bill Hunt article is:
Speaking of which… a couple weeks ago, when Disney and Sony launched the successful strategy of counter-selling their Blu-ray software titles 2 for 1 the same week Paramount and DreamWorks released Transformers on HD-DVD, we got a few e-mails from HD-DVD fans telling us how lame that was. Well, consider this: Is it any accident that Toshiba didn’t wait for Black Friday to sell their $99 HD-DVD player, instead carefully planning the 3-day sale for the weekend before Disney and Pixar release Cars, Ratatouille and Pixar Short Films Collection on Blu-ray? <Dude, retail is driving the early sale, it’s a new promotion by Walmart, nothing by Toshiba.  Are you stupid?  It’s a war of retailers, not like Toshiba told them to sell it at under $99.  I can’t believe people even listen to you.> Not a chance, folks. So Toshiba is slashing HD-DVD hardware prices to counteract the release of blockbuster Blu-ray software. What does that tell you about the viability of HD-DVD going into a fourth quarter that, by all accounts, is make or break for the format? (Especially with Warner Home Video now hinting that they’re looking at the fourth quarter to “reevaluate” their dual format support)  <Yes, especially since WB always promoted IME and joined Toshiba and Microsoft in this group promoting HDi.  And they stated they will re-evaluate, meaning looking at both software and hardware sales and potential of both Blu-ray and HD DVD.  They even denied they “favored” Blu-ray and said their comment was taken WAY OUT OF CONTEXT.  Well, what do you expect.  Blu’s like to spin things their way, even if it totally changes the meaning of a statement 180 degrees.  It’ll never change.>

Hey – there’s no doubt that thousands of eager consumers <yes, eager MASS MARKET CONSUMERS who will only jump on cheap players, not $399.99 PS3’s even if it claims it can fly> will get a deal on cheap hardware this weekend. But it still isn’t going to be the format war winner for HD-DVD that some would like to believe. On the contrary, it means that Toshiba is getting desperate… and is going even more deeply into the red with this format <You MUST be talking about SONY here going into the red with their PS3s>. Given the strength of their rhetoric this week, it’s a safe bet that the Blu-ray camp will continue to press their advantage in the fourth quarter, and start turning up the heat on HD-DVD in the weeks and months ahead.

It boggles the mind to think that any reasonable person can still believe at this point that the HD-DVD format represents a viable long-term business for Hollywood <Again, you mean PS3 and Blu-ray with their non-finalized specs, issues with playbacks everytime a new BD+ layer comes out, or their ridiculously expensive players?>. Toshiba is effectively paying studios to support them, and now they’re practically giving their hardware and software away. Do you suppose we’ll see free HD-DVD player offers in Cracker Jacks and breakfast cereal next? $50 players? $25 players?

Experienced fighter pilots will tell you that when you dive your aircraft at the deck, you very quickly run out of maneuvering room. Seems like the ground’s coming up awfully fast for HD-DVD <You talking bout PS3 yet AGAIN?  Sony seems like they are struggling to breathe>.

Back with more on Blu-ray Fest later this afternoon. Stay tuned..”

%d bloggers like this: