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Will missed target numbers shift any format suppoft from the studios?


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#1 of 76 OFFLINE   ppltd

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Posted November 25 2006 - 01:17 PM

With the initial estimates in, and Sony again missing their release numbers, will the Studio support for BD begin to errode. With Sony's production delay after delay, and the unlikelkhood that they will be able to get even 1/2 million boxes out this year, the shot in the arm that BD supporters were expecting has at best been muted.

Add to this the unexpected popularity of the HD-Add-on for the 360 (analysts state 100,000 add-on's have been shipped by MS in their initial allotment), and it looks like the format war is even further away from a solution.

Quote:
American Technology Research's P.J. McNealy, in a note to investors, said there were just 125,000 to 175,000 PS3s in stores for the system's launch. Sony and Nintendo Release Estimates

Where does this leave us as early adopters? In a worse place than we were before. With no knock out blow from the BD camp (which I was expecting), consumer confusion will continue, and the likelyhood of consumer support for one format or the other has been pushed off into the distant future.
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#2 of 76 OFFLINE   Robert Crawford

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Posted November 25 2006 - 01:50 PM

I always thought that this holiday season will be the end of the first quarter with three more quarters to go starting in 2007.

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#3 of 76 OFFLINE   DanR

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Posted November 25 2006 - 02:07 PM

Quote:
Originally Posted by ppltd
With the initial estimates in, and Sony again missing their release numbers, will the Studio support for BD begin to errode. With Sony's production delay after delay, and the unlikelkhood that they will be able to get even 1/2 million boxes out this year, the shot in the arm that BD supporters were expecting has at best been muted.
Sony has been flying in units since the launch. The Best Buy by me got 20 more units just this past Wednesday.

Quote:
Originally Posted by ppltd
Add to this the unexpected popularity of the HD-Add-on for the 360 (analysts state 100,000 add-on's have been shipped by MS in their initial allotment), and it looks like the format war is even further away from a solution.
Microsoft has not released any information as to how many units they have shipped. Don't you think that if it were that great, they'd be trumpeting it?

Quote:
Originally Posted by ppltd
Where does this leave us as early adopters? In a worse place than we were before. With no knock out blow from the BD camp (which I was expecting), consumer confusion will continue, and the likelyhood of consumer support for one format or the other has been pushed off into the distant future.
Consumer confusion will continue, and that is not good. However, BD is just gaining steam now. In reality, 4Q was the BD launch. People can debate the merits of BD's initial launch in June all they want (and whether it was a good idea or not), but the fact now is that all studios slated to produce in BD are now releasing as of 4Q, and more players are scheduled to hit soon.

HD DVD really needs more CE manufacturers to step in and make some players, and they also need one of either Disney or Fox to start releasing on HD DVD and ASAP.

CES is going to be huge. I expect BD companies will show 2G players, possibly at multiple price points. I don't know what to expect out of the HD DVD camp, but I hope they have something up their sleeve.

2006 was the launch and just a skirmish in this battle. 2007 is going to be more about absolute performance and breadth of support (CE devices and content) for each format. That will lead into 2008, where I suspect a clearer picture of the long term state of HD on disc will emerge.

Regards,
Dan

#4 of 76 OFFLINE   ppltd

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Posted November 25 2006 - 04:46 PM

Quote:
Originally Posted by DanR
Sony has been flying in units since the launch. The Best Buy by me got 20 more units just this past Wednesday.

Of course they have. Dosen't change the fact that they missed their mark by of 50 %. And this was after the reduction. They will not hit 500K by the end of the year.

Quote:
Originally Posted by DanR
Microsoft has not released any information as to how many units they have shipped. Don't you think that if it were that great, they'd be trumpeting it?

Neither Sony of MS has released numbers. These are based on analysts studies of deliveries. As far as Miscosoft announcing sales figures this close to release, I can not see why they would. They have certainly announced that the demand took them by surprise.


Quote:
Originally Posted by DanR
Consumer confusion will continue, and that is not good. However, BD is just gaining steam now. In reality, 4Q was the BD launch.

BD launched nearly 6 months ago. I guess with this logic, HD launched at the release of the HD add-on. They launched when they hit the market. It was not like DVD, that was only availble for the first 6 months in two or three markets.

Quote:
Originally Posted by DanR
People can debate the merits of BD's initial launch in June all they want (and whether it was a good idea or not), but the fact now is that all studios slated to produce in BD are now releasing as of 4Q, and more players are scheduled to hit soon.

And we continue to wait.

Quote:
Originally Posted by DanR
HD DVD really needs more CE manufacturers to step in and make some players, and they also need one of either Disney or Fox to start releasing on HD DVD and ASAP.

I disagree on the manufacturers, but agree with the studio support.

Quote:
Originally Posted by DanR
CES is going to be huge. I expect BD companies will show 2G players, possibly at multiple price points. I don't know what to expect out of the HD DVD camp, but I hope they have something up their sleeve.

2006 was the launch and just a skirmish in this battle. 2007 is going to be more about absolute performance and breadth of support (CE devices and content) for each format. That will lead into 2008, where I suspect a clearer picture of the long term state of HD on disc will emerge.

I agree that CES will be important, but I am not sure just how much. The studios banked on Sony to deliver a blow, and they fell very short of the target. What this will mean to the future of either camp is undetermined, but it certainly is a setback.

I expect that this war will continue through next year, at which time we will probably find that we will have to live with two formats, much like Sirius and XM, and DirecTV and Dish. Or the formats will die out. Take your pick, either is possible.

In the mean time, I will continue to collect my HD-DVD's and my BD's and let the battles continue.
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#5 of 76 OFFLINE   Peter Overduin

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Posted November 25 2006 - 05:32 PM

I am somewhat miffed and perversely so by Fox's position in particular. Peter Staddon was a long time member of this forum and HT enthusiast. He, above many others, should have seen this coming. The end result...? Neither Fox nor Disney will enjoy the fruits of High Definition DVD, since, whatever crap BD supporters want to trumpet, and all the BS about lack of OEM's on the HD side, there are in fact multiple times more HD capable devices on the market today that are geared to the movie playing audience and both Fox and Disney have lost out on this Not only did PS3 miss target numbers in a big way; in fact, PS3 buyers are not BD movies buyers. It didn't happen with PS2and is not happening now with PS3...talk to your local retailer and in almost all cases, you will find this to be true.

Money talks and pressure will come from the shareholders for both of these misfit companies to get with the program.
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#6 of 76 OFFLINE   Ryan-G

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Posted November 25 2006 - 05:34 PM

I think the PS3 lauch is proving to be a critical turning point in the format war, and one that may very well shift the whole thing into Tosh's hands.

The first major issue is launch numbers. Less than half of an already incredibly conservative 400,000 units. Sony blames it on Diodes, I say they're full of it. IBM went on record as saying yields on Cell were in the 10-20% range for PS3 quality processors, as well as alluding to unexpected failures, and I suspect that Sony's problem isn't diodes, but the Cell. They won't admit something's wrong with their golden child, but IMO there's the issue. Cell's a big chip, expensive to manufacture, and slow to manufacture. I suspect Sony's going to continue to have serious problems with PS3 for the foreseeable future and I think 2 million units in the U.S. may not happen until sometime 2H 2007, which would be a fatal error because by that point no one will want it.

The second major issue is their downconversion problem, which Arstechnica and Anandtech are reporting affects BR movies even worse than games. If PS3 can't find a 1080i/p compatible TV, it's supposedly downconverting to 480p instead of 720p. Even today the majority of LCD's are 720p and many Plasma's still are too, there's too many on the market to not be able to support 720p. Sony can fix this by shifting downcoversion to Cell and the GPU, but it'll take time. Months, probably, considering they can't figure out if what the problem is yet.

Low numbers and critical display problems mean the silver bullet that was the PS3 is no longer a factor for BR, if true. At that point, Studios may very well choose to take stock and support both formats since VC1 is now common and they can just ship off the media for reproduction without added cost. If that occurs, BR can conceivably lose this war.

Add into that the increasing occurance of previously PS3 only titles shifting to multi-platform, and PS3's price, and there's a serious probability that PS3 is going to fail. Just this week 2 more formerly PS3 exclusives announced 360 and PC releases as well. This is a very serious problem, if PS3 has no/very few exclusives and the other platforms do, PS3 will be viewed as a poor choice. 360 and the PC have a fairly formidable selection of exclusives that could easily sway people to those platforms instead of PS3 if PS3 has no compelling exclusives.

The only thing BR has in it's advantage at this point is library size. If studios shift, momentum will shift to HD-DVD, and by the time BR can actually get Players to market and down to a reasonable price range, they could easily find themselves with a negative reputation. Especially since it looks like many will be burned by the PS3.

Finally, MS is very successfully picking up alot of steam in the media market. The HD-DVD Player is selling much better than expected, and demand for their Live TV/Movie service is beyond expectations and capacity. Vista is likewise positioned for a new media market. This gives MS increasing leverage with studios, and MS is very solidly HD-DVD if only to cause serious problems for Sony and PS3.

Sony needs to move on these issues NOW. There's literally no time to wait, PS3's taking one blow after another, and without those guaranteed Players on the market, I wouldn't be surprised to see more movement to HD-DVD. Especially with MS's increasing presence in the media market.

#7 of 76 OFFLINE   MarekM

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Posted November 25 2006 - 07:28 PM

Quote:
Originally Posted by ppltd
Of course they have. Dosen't change the fact that they missed their mark by of 50 %. And this was after the reduction. They will not hit 500K by the end of the year.

you pick that number again just like that ? you are writing it like you have magic ball which will show you numbers from january Thomas......., please stop posting numbers like facts.....


Quote:

I disagree on the manufacturers, but agree with the studio support.

so you think if BD camp will be putting on market many more player, and possible they will reduce prices, that TOSHIBA will have enough power to support HD DVD with players ALONE ?

Quote:

I agree that CES will be important, but I am not sure just how much. The studios banked on Sony to deliver a blow, and they fell very short of the target. What this will mean to the future of either camp is undetermined, but it certainly is a setback.

you don't know how many PS3 players will be out beofre the END OF THE YEAR !! then you can talk about blowing something.......

Marek

#8 of 76 OFFLINE   MarekM

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Posted November 25 2006 - 07:32 PM

Quote:
Originally Posted by Peter Overduin
in fact, PS3 buyers are not BD movies buyers. It didn't happen with PS2and is not happening now with PS3...talk to your local retailer and in almost all cases, you will find this to be true.

hmm, I am sure you did check all of them, so you can post it as fact....

Marek

#9 of 76 OFFLINE   Ryan-G

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Posted November 25 2006 - 07:47 PM

Quote:
Originally Posted by MarekM
you don't know how many PS3 players will be out beofre the END OF THE YEAR !! then you can talk about blowing something.......

Marek

If Sony couldn't hit 400,000 or even 200,000 units on launch day with ~6-9 months production time, it's very highly unlikely they'll hit 500,000 with only 30 days to do it. It's pretty much impossible for them to hit their projected millions.

Full blown production has been going for months, and all they had to show for it was ~255,000 units worldwide. 80,000 in Japan, 175,000 at best in the U.S.

On top of that, they need to hold back and start stockpiling for the European release. If they can't produce any meaningfull quantity of units for the U.S. and Japan, how are they going to manage to supply those areas and stockpile units for Europe?

This whole thing is an outright disaster from any angle.

#10 of 76 OFFLINE   PeterTHX

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Posted November 26 2006 - 01:27 AM

Quote:
If Sony couldn't hit 400,000 or even 200,000 units on launch day with ~6-9 months production time

That isn't true. The first PS3 units rolled off the assembly line in mid OCTOBER.

Don't confuse prototypes and test units with actual consumer production units.

Not to mention the thousands more that will be shipped between now and Christmas. November isn't even over yet! Sheesh.

#11 of 76 OFFLINE   ChrisMatson

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Posted November 26 2006 - 02:24 AM

So all together, how many of the following are currently on the market:
1. HD-DVD players + XBOX add-ons
2. BD Players + PS3s

Take together with this:
In January, the Consumer Electronics Association predicted that more than 600,000 high-definition DVD players, worth $484 million, would be sold this year. Shipment delays and production problems have twice caused the organization to lower its forecast, and it now expects U.S. sales to reach only 200,000 players, worth $181 million, by the end of the year.

Those numbers don't include sales of video game consoles, which manufacturers hope will give the new formats a boost.
http://www.washingto....112300987.html

By any estimation, BD players + PS3 will have a much greater market share by the end of the year (if not already) and certainly moving forward.

#12 of 76 OFFLINE   ppltd

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Posted November 26 2006 - 02:29 AM

Quote:
Originally Posted by MarekM
you pick that number again just like that ? you are writing it like you have magic ball which will show you numbers from january Thomas......., please stop posting numbers like facts.....

I am basing my guess on current projections, and on current numbers. Don't shoot the messenger because that Golden Child Sony has their head stuck in the ground. I have been pretty much on the money on the numbers I thought Sony would be able to bring out, because I follow the financials, and the tech rags (my industry). The analysts from these sources are normally spot on.

When I post numbers from another source, I post the link. It is obvious that the numbers I speak of without such our my opinion. No crystal ball needed, just study the history of the PS3 and Sony's statements and performance.


Quote:
Originally Posted by MarekM
so you think if BD camp will be putting on market many more player, and possible they will reduce prices, that TOSHIBA will have enough power to support HD DVD with players ALONE ?

Now your crystal ball is showing. I am not so sure you will not see additional hardware support for HD-DVD at the January CES show. We will have to wait and see.

No, I do not see any price reduction in Hardware any time soon, for either BD or HD. Although, if you are a 360 owner, 199.99 is the cheapest way to get into the High Def market.

Quote:
Originally Posted by MarekM
you don't know how many PS3 players will be out beofre the END OF THE YEAR !! then you can talk about blowing something.......

No, but past performance is a very good measuring stick, and currently sony's past performance on the BD and PS3 front couldn't go much lower. As far as blowing it, Sony blew the PS3 release back in July, when it was supposed to originally be released. Since then, it has been one disaster after another for Sony. How could one possible see any thing other than this when they missed their target numbers by nearly 60%, even after reducing the numbers numerous times before.
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#13 of 76 OFFLINE   ppltd

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Posted November 26 2006 - 02:37 AM

Quote:
Originally Posted by ChrisMatson
So all together, how many of the following are currently on the market:
1. HD-DVD players + XBOX add-ons
2. BD Players + PS3s

Take together with this:
In January, the Consumer Electronics Association predicted that more than 600,000 high-definition DVD players, worth $484 million, would be sold this year. Shipment delays and production problems have twice caused the organization to lower its forecast, and it now expects U.S. sales to reach only 200,000 players, worth $181 million, by the end of the year.

Those numbers don't include sales of video game consoles, which manufacturers hope will give the new formats a boost.
http://www.washingto....112300987.html

By any estimation, BD players + PS3 will have a much greater market share by the end of the year (if not already) and certainly moving forward.

You disregard the impact the HD add-one for the MS will have in the market. What will the final number of HD (both formats) be at the end of the year, what will the number be that will be purchased to view movies, not to play games, how many PS3 and add-on units will be available, all good questions, and one can only make assessments based on current performance of the companies involved. I guess I just don't read it the same way you do.
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#14 of 76 OFFLINE   ChrisMatson

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Posted November 26 2006 - 02:50 AM

Quote:
Originally Posted by ppltd
You disregard the impact the HD add-one for the MS will have in the market. What will the final number of HD (both formats) be at the end of the year, what will the number be that will be purchased to view movies, not to play games, how many PS3 and add-on units will be available, all good questions, and one can only make assessments based on current performance of the companies involved. I guess I just don't read it the same way you do.

If I accept your numbers:
Add to this the unexpected popularity of the HD-Add-on for the 360 (analysts state 100,000 add-on's have been shipped by MS in their initial allotment), and it looks like the format war is even further away from a solution.
Then the add-on has sold about 1/3 to 1/2 of PS3 numbers.

#15 of 76 OFFLINE   FrancisP

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Posted November 26 2006 - 04:58 AM

If the theory that the PS3 is a decisive factor then it should start showing up.
There are more playstations out there than there are BR or HD-DVD players combined. BR should start blowing away HD-DVD within the next several months. If not then the whole theory about PS is a lot of smoke.

#16 of 76 OFFLINE   Scott Walburn

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Posted November 26 2006 - 05:33 AM

I have a couple thoughts, that I wanted to post. My first thought is, is there any way to track actual software sales as opposed to player sales. I mean hardware sales don't seem to work that well when you factor in the PS3. Clearly, PS3 will give blu-ray much more hardware, but the problem is that most people are using it as a game machine, and have no choice about blu-ray. I know Sony is banking on that fact to sell discs, but is there anyway to see concrete sales of software. I mean at least with the xbox add on, you know people will be buying discs because they are choosing to purchase the add on to buy movies. There is no other reason to have it. I'm just curious if there is someway to value an xbox add on versus the PS3. Is one xbox360 add on worth 10 ps3 sales as far as software sales are concerned? I'm really just thinking out loud. I just don't think it is a fair analysis to count straight hardware when most ps3 owners don't have hdtv's or won't buy blu ray discs. If I was a HD DVD expert or Blu Ray expert, you could really earn your paycheck if you could forcast the software sales. I don't think any of us are going to have good grip on this war for at least another year. I will state that I am one of those who had a xbox 360 and purchased the add on when it came it. It was a no brainer for me. I have four movies as we speak. I've never had any playstation product in my life (I'm in the minority) but I'm considering buying one solely for the blu ray player. I wonder how many ps3 sales are people like me who have no interest in it as a gaming tool and only want the blu ray player. Again just thinking out loud, but for difficult for the experts to forcast.

#17 of 76 OFFLINE   AaronSCH

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Posted November 26 2006 - 06:22 AM

The only question that remains for me is what percentage of those PS3s are gonna translate into Blu-ray movie purchases. I continue to believe it will be a small fraction since these are primarily game consoles and many will be hooked to displays that are unable to playback high definition content. These target numbers mean nothing. It is obvious there is a huge demand for the PS3 and Sony will sell every console they ship. However, every X-Box HD-DVD add-on is being purchased specifically to play HD DVD content. So Microsoft's Add-On sales numbers naturally should hold more weight. Neither format will have the consumer masses converting to high definition over night. I have owned my HD DVD player for 5 months and I haven't missed anything from Fox Sony or Disney and never will. I rent the SD DVD version and watch them on my terrific upconverting Toshiba HD A1 and wait for the inevitable: Full studio support.

#18 of 76 OFFLINE   Garrett Lundy

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Posted November 26 2006 - 07:13 AM

Quote:
Originally Posted by ppltd

Add to this the unexpected popularity of the HD-Add-on for the 360 (analysts state 100,000 add-on's have been shipped by MS in their initial allotment), and it looks like the format war is even further away from a solution.
From what I've seen, the HD-DVD drive is an Unpopular attachment. Every K-Mart, Wal*Mart, and Electronics Boutique I have been to in the past week has had at least 3 drive units sitting around waiting to be purcased. I have yet to even see any Playstation3 in the flesh, regardless of how many have shipped.

Now when they sell 100,000 HD-DVD drives I'll be impressed.
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#19 of 76 OFFLINE   Shane Martin

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Posted November 26 2006 - 07:30 AM

Quote:
From what I've seen, the HD-DVD drive is an Unpopular attachment. Every K-Mart, Wal*Mart, and Electronics Boutique I have been to in the past week has had at least 3 drive units sitting around waiting to be purcased
they are completely sold out here.

#20 of 76 OFFLINE   Shawn Perron

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Posted November 26 2006 - 08:56 AM

The big advantage the PS3 has over the add on for the 360 is that they already own it. People with a PS3 curious about Blu-Ray can hit Netflix or thier local Blockbusters for a HD movie. If they enjoy the experience, they are very likely to repeat it with only the expense of the software (since they alreay own a player). Anyone curious about HD-DVD that owns a 360 has to pony up $200 just to try it out.

The biggest hurdle the 360 add on has is that it doesn't actually add anything to the actual gaming experience. It's $200 simply to play movies, and most people are already thrilled by DVD quality. It's a very big leap to assume that someone not already extremely interested in HD-DVD is going to spend $200 on a peripheral for a gaming console that doesn't actually do anything for actual games.

The HD-DVD add on is going to eventually stall in sales unless some BIG movie comes out for it. As popular as King Kong was, it's certainly not a format seller like Star Wars or Lord of the Rings would be (if you look at the demographic that buys the consoles to start with).

The PS3 faces the same problem. The upfront price is just ridiculous for a game console. Unless some killer games or a BIG movie like Star Wars is announced, it too will stall in sales. Once the hoopla about the launch settles down, people will start to realize that there really aren't any games that make the PS3 worth $600.

In the end, I don't think either will matter. As long as the HD movies aren't priced competetively with SD DVD, there's just no way the average consumer will get involved. The big problem is that the 2 formats are just obscuring the big Hollywood monopoly. As long as the studios aren't going to be price competetive, there really isn't much of a war. Much like cds, there seems to be an unspoken agreement between the studios that the price will be set at a certain level, and no one will attempt to undercut that price. If this were any other industry having a "format war" prices would be dropping like rocks as the companies made moves to try and capture the market. Instead we get to watch 2 comparable formats run a dead heat with no real incentive for the consumer to get involved until the "war" works out one way or another.


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