Why the PS3 is the most important piece of CE gear of the new Millennia.

Despite a complete lack of enthusiasm for the next generation of DVD, it is coming. With it is the inevitable format war that is both asinine and expected. For the most part, though, the initial offerings of players will largely be irrelevant to the war or the format's future.

Toshiba, whenever they start selling HD DVD, will likely sell many due to the promise of HD, and the relatively low price of admission. But, I doubt they will sell a lot though, for two reasons,
1) People who aren't into HT, probably don't have an HDTV anyway. This isn't going to get them to buy an HDTV. For these people, DVD is "Good enough."
2) People who are into HT, aren't going to buy it because they know of the format war.

Sony and their posse, on the other hand, should expect to sell even few Blu-ray players, for obvious reasons.
1) Price. $1000 for a player? The spin is that this is what DVD players cost when they first came out. Thanks, but your competition is less than half your price. The argument as to which format is better will largely be mute when you're double the price. At least, for many people.
2) People who are into HT, aren't going to buy it because they know of the format war.
3) Well, the same as HD DVD's #1

The not-so-hidden Ace in the sleeve is PlayStation 3. Sony expects to sell 6 million by March of next year. I have no reason to doubt they will. PlayStation 2 came out at a time when most people didn't have a DVD player. For $300 they could get the latest game console (always a good thing) that played all their PS1 games, AND it played DVDs. PS3 is bound to change the landscape of CE gear for the coming year and beyond because,
1) PS3 is a reason that people will buy an HDTV. I know this because of how many emails I received in the months leading up to Xbox360's release about what HDTV would be the best for Xbox360. I expect the same, in greater numbers, for PS3.
2) Within a few months of its release, the installed base of Blu-ray player owners (in the guise of PS3), will be close to 60% of the total number of HDTV owners. This isn't 100% overlap, but it's numbers that can't be ignored. Sure it can be said that PS3 owners may not buy Blu-ray movies en masse, but they can which is the important part.
3) I can't see any way that Toshiba will be able to sell 6 million HD DVD players (and technically more, as there will be a few people who will pay the $1000 for a Blu-ray player), by March of next year, despite a far lower cost and a much better name.

So what does this mean? Should Toshiba give up now? As I said before, there is no doubt they will sell players, but even if they lowered the price to be the same as a regular DVD player, you'd still have that 6mil number to contend with. PS3 will also lower the parts cost for other Blu-ray players, so by the end of 2007 if not sooner I'd expect to see Blu-Ray players at far more reasonable prices (though there will doubtless be a decrease in HD DVD prices as well).

So while it is obvious there is going to be a format war, I think the vast majority of consumers are going to bypass it entirely, and the future will be decided by the gamers. One controller to rule them all…

Brandon's picture

I thought your assessment of the situation very plausable, but you did not include the ability of HD-DVD players to be "universal" players and play blu-ray discs as well. I think this option could end a format war on the hardware side of things, while "universal" players could prolong a format war on the software side.

Geoffrey Morrison's picture

Really, either side could come out with a universal player. It