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Summary:

With news that Universal is planning to sell its movies in Sony’s Blu-ray format, and Paramount sidling in that direction as well, Blu-ray has managed to bring all the Hollywood studios under its own standards banner, rendering its supremacy in the format war against HD-DVD indisputable. […]

blue-ray.jpgWith news that Universal is planning to sell its movies in Sony’s Blu-ray format, and Paramount sidling in that direction as well, Blu-ray has managed to bring all the Hollywood studios under its own standards banner, rendering its supremacy in the format war against HD-DVD indisputable.

Maybe I’m missing something, but this strikes me as a disastrous victory for Blu-ray and Hollywood alike, borne from ignorance of the game industry and a myopically arrogant assumption that movies per se still drive the high-technology market in video. The studios are putting their weight behind a standard which is now almost certainly destined to remain niche for years — if it doesn’t go totally defunct in the process.

Why? Well, consider who owns Blu-ray players: The bulk of the format’s install base are owners of Sony’s Playstation 3 game console, which has the drive built in. (In the U.S. there are 3 million PS3s, compared with just 500,000 standalone Blu-ray players.) But as anyone who follows games knows — none of whom work in the film industry, apparently — the PS3 is selling horribly in comparison to other install bases.

Last holiday season, the 8-year-old PS2 was still selling better than the PS3, for God’s sake. For the second year since going on sale, gamers have decisively rejected the PS3 for the Xbox 360, which currently has double PS3’s 9 million-unit install base (and can play HD-DVD with an upgrade), and even moreso for the phenomenally popular Wii, which plays neither high-definition format. (Follow the console war numbers on VGChartz.com.)

At least PS3 gets the Blu-ray to a good headstart, right? Well, sort of. But as far as Hollywood’s concerned, here’s the worst part: According to an NPD report from last August, 60 percent of PS3 owners are not even aware their console has a Blu-ray player. A marketing campaign would boost awareness and excitement for Sony’s high-definition DVD, of course, but to expand this market, the company will have to target early adopter hardware fans, who are generally males aged 18 through 34…many of whom already own an Xbox 360 or a Wii. Thanks to Sony’s format bullying, there are now some 30 million-plus next-gen console owners who must somehow be goaded into spending $600 or so on another game console, mainly so Transformers looks a bit better on their HDTV. (If they even own a high-definition TV, yet another consumer adoption hurdle.) Hard to see that happening, even with a Blue-ray price cut.

So what happens now? There’s hints that Microsoft may make the 360 Blu-ray compatible, but even if that happens, it’s unlikely to move the market much. Instead, broadband connection (360 and the Wii both have them) will route around the need for any disc format, with 360 owners preferring to buy high-def content from Microsoft’s fairly successful video download service, Wii owners enjoying Net-delivered video with StumbleUpon’s widget, and everyone else sticking with HDMi cable. Meantime, in their ambition to dominate by eliminating alternatives, Sony has probably remanded itself to owning the market for a niche format, like the Laserdisc of the 80s and 90s that never appealed to anyone beyond hardcore videophiles. (Anyone but me even remember those?)

Wagner James Au is GigaOM’s games editor and writes about Second Life for his blog New World Notes.

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  1. Blue Ray media is outselling HD-DVD media by a ratio of 2:1. While you may believe that BR is bad for the industry, it’s better than HD-DVD which simply wasn’t selling.

  2. Please if you an Xbox fanboy just say so. dont try and make a point that cant be made. already games have came out that required the size fo the Blu-ray RFOM is the first at 16 + GB so the format will be used for more and more games. and you statement that the PS3 is selling ” horribly” it is selling at a higher rate then the Xbox 360 did its first year. I have 5 Blu-ray movies. the rest of you artical is not even worth commiting on. please if you are going to through around numbers get them right.

  3. You seem like a disgruntled Xbox or HD-DVD fanboy. There are several things taken out of context in your article.

    Sales
    Xbox 360 has been out for two years and PS3 one year. Of course they are going to have more sales. The sales would be more impressive if this would have occured in one year.

    The ps2 & wii still sells better because parent’s can’t afford to pay $$$ for the PS3.

    Media
    Internet based delivered media is the future but it will not be here in time for this generation of Consoles. Plus the wii and some of the xbox don’t have drives so the industry can not rely on these console’s to push this ideal.

    There is way too much investedin the Blu-Ray format. Too many companies to just abandon it in the next year or so. Blu-Ray will be used for at least the next 4 to 5 year if not longer. Maybe after that will the movement for broadband delivered content can truely take off.

    With the price of hard drives declining and the space of hard drives increasing, I agree with you that the future of media is streamed media. I just don’t agree that the Xbox and Wii will dominate this market.

  4. Completely agree.

    Standard DVD technology will do just fine until the idea of buying bits on shiny lucite covered discs is rendered charmingly obsolete.

  5. Wagner James has no idea of what he is talking about! Download movies is not like downloading songs, require huge bandwidth and time. Download movie online required credit card, most people don’t feel safe. Download movie has no bonus materials like director’s interview and BD-java games. U think movie studios and Walmart will embrace download full heartedly, they stand loose billions. Game reviewer should stick to games.

  6. Maybe Sony will use a little bit of the money saved from slimming down their PS3 lineup for marketing purposes. Or maybe Blu-ray will end up defunct in the end, just as will HD DVD and now (why oh why!?) and HD VMD. DVD’s and upscaling DVD players will outselling all high-def formats until digital media is advanced enough that physical media will die altogether. With the exception of our internet-enable HDTV’s, of course.

  7. you are a real dumb ass.
    1. you write PS3 is not selling because gamers don’t like it
    2. then you say PS3 owners don’t care/know about the BD player -> implies that they care more about gaming
    3. you conclude that they will lose when they just won.

    => you are the dickest fumb duck

  8. I laugh every time I see someone write, yet again, that downloadable content will make physical media obsolete before Blu-ray ever really takes hold. It’s like they don’t know any normal people. Go to a consumer electronics store sometime, take your pick, any one will do. Until movie downloads are near-instant and stupidly easy and very well advertised and actively pushed by consumer electronics stores on people who don’t know any better (which accounts for the vast majority of people), Blu-ray need not be too worried about it’s existence. Downloads will definitely win in the end, but that isn’t nearly as soon as some people keep making it out to be. If not because of clueless consumers, then because of the sheer size of HD content and the meager bandwidth referred to as “broadband” these days. Until a significant percentage of people have 30 – 50MBit/s connections, HD movie downloads really aren’t going to fly.

  9. Article is just plain wrong sadly.

    1. Most of the Blu-ray players out there being the PS3 is a bad thing? I dont see how. Early in the development of players, the PS3 was simply the best player on the market. Of course it sold well. It’s not like the supar DVD player that the PS2 was. PS3 is actually a REALLY good Blu-ray plare. And the sales back it up. I’ve spoken to many people who own more than one. One for their kids to play games, and another to play Blu-ray’s.

    2. 60% of PS3 dont know the PS3 even plays Blu-rays. Again, bad? How so? I see this as a 60% chunk of people already OWN Blu-ray players and dont even know it. And Blu-ray disc sales STILL double HDDVD sales. So when that 60% finds out, do you thiunk sales will go down? If my math is correct, they should go UP around 60%! LOL

    3. 600 dollar PS3? Was this article written last year? The PS3 hasnt cost 600 dollars for a while now.

    4. It’s not SOny’s high definition DVD format. Lots of companies were behind it’s creation.

    5. It’s Blu-ray, not ‘Blue-ray’. You might want to educate yourself on a subject before trying to sound like an authoriative and knowledgable source of information.

  10. Scott Beckstead Friday, January 11, 2008

    No matter how good the MicroSoft backed HD-DVD is it is not as good as Blu-Ray. Your numbers are off and you obviously are a Microsoft Shill. Go away!

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