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Sony: PS3 Gaming or Movies? |

BDI’ve seen a lot of editorials postulating that Sony is putting a BD (Blu-ray Disc) player into the PS3 as a strategic move in the war against Toshiba. I can buy that. It makes sense, after all. Put BD players in as many hands as possible, and it could end up winning the HD disc format war for Sony. Sony failed with Betamax, failed with MiniDisc, and somewhat failed with MemoryStick. They really want Blu-ray to win. And to be clear: I have no problem whatsoever with Sony putting their own proprietary formats out there for standardization. It’s a free market, and they are their own entity who is allowed to try what they want. If it’s no good, market forces will punish them for it. If they do good, then the market will reward them. That’s just how things work. So if Sony chooses to try again with Blu-ray, more power to them. This time is a little different, though. They got the support of a bunch of electronics companies behind them, and it looks like it’ll be pretty hard for them to lose this particular battle.

But that’s not even the point of my writing this. Let’s get back to those many editorials I mentioned. They say that Sony is putting BD players into PS3’s to help in the war against Toshiba. Fine. But then they go on to say that winning the next-gen HD disc war is more important to Sony than winning the next-gen console war. And that’s where they lose me. I just have a hard time believing that all the money they make from the PlayStation brand, including software and hardware, is so much chaff when compared to the potential revenue from BD licensing. I’m sure the latter is worth millions, or maybe even billions of dollars, to Sony. But does it really outweight gaming revenue so much? While total income from gaming has traditionally been on the small side compared to their electronics business, it has also historically accounted for a much larger share of operating profit.

So do I think that gaming plays second fiddle to HD movies? Nope, I don’t think so. I think that gaming is just as important, if not more so. And as you can see, I backed myself up with cold hard facts! 😉

Next Generation – Console War a Side-Quest for Sony?

  • observer

    “side quest”? Someone has been playing too many RPGs.

    Yes, that article is ridiculous. Maybe the PC and server businesses of Dell and Apple are also merely vehicles to force the Blu-Ray conspiracy on everyone.

  • Black Guy

    Its a free market? U really think so? Kind of off subject but…

    Why does everyone get all hurt when MS includes a feature into its product for standardization? Google is in a tussle over MS decision to make MSN search the default search engine of IE7 ‘cuz Vista has the potential to reach so many consumers. I say, “So what?” It’s their product, they should be able to do as they please w/ it. Google is not helping to develop Vista so who are they to say anything…

    No one has anything to say over Sony’s choice of including BR into the PS3? If the PS3 is the hit, it could tilt the hand in this developing format war. Why isn’t the HD-DVD camp suing the nutts off Sony for this move. Its almost daily that company A is suing company B for including a alternative choice, that is seperately availabe from company A, in powerful product of company B’s. There is definitely a precident for these sort of things; just look @ MS getting their asses sued everyday for bundling products and services.

    I’m just suprised Toshiba has not moved to block Sony from including BR into PS3 on the same grounds that companies like MS has gotten broke off by the courts for employing similar tactics.

  • Black Guy

    To comment on the post, Sony gaming business only accounts for less than 10-14% of its income; a figure that has been steadily decreasing since the new CEO came on board. This is a good thing ‘cuz this means there r other divisions that r now becoming profitable.

    Sony IS more concerned about the success of BR than the PS3. The PS3 will only be relevant until the next generation of systems come onto the scene. However, BR like DVD b4 it, can provide a steady stream of royalties from contents producers and equipmenet manufactures for the next 15-20 yrs. The combined sales of BR movies and players will easily dwarf anything the PS brand can muster.

    If BR looses, it will b another failure to add to an embarassinly long list, one of PS3’s most prominent features to boast will have no content (besides games) and Sony will need to continue including a very expensive drive for the remainder of the PS3’s life, and most importantly – to the corporation – investors will loose faith in Sony’s long term health which will have a SEVERE long term financial impact on so many levels.

    If BR fails, there may not b another chance, cuz by the time the industry is ready for another format, digital distribution will be the new medium. Its would b a lot more painful to the company than if the PS3 actually got its ass handed to. They’ll have another chance w/ PS4 if that happened but not w/ BR.

  • Matt

    Good post Black Guy. I really don’t care how many PS3 are sold. This won’t guarantee the success of Blu-Ray. If Blu-Ray fails Sony is in a world of hurt.

    The thing that will guarantee the next format winner is the amount of movies being sold. AMD failed not because of the quantity of PSPs to play those movies on but the fact that no one was buying movies.

    The HD DVD format will not be as quick to overtake its predecessor, the DVD. The difference from VHS to DVD was gigantic. No more fast forwarding/rewinding, extra features, and the max resolution for SDTV. DVDs are now cheap and almost everyone has them. Switching non tech people to DVD was easy after they were exposed to it. This will not be the case with the next formats. If you don’t own a HDTV than you will not benefit from the enhanced visuals. So why spend twice as much for a movie?

    I own a HDTV and really look forward to picking up an HD-DVD player (Cheaper movies). I am also a tech freak and usually get the newest tech within a month or two of release. All to many times I have seen people struggle to see a difference between SDTV and HDTV (I have no idea why).

    The thing I find the funniest about the 360/PS3 war is that almost all of the people talking trash will/are playing their next gen system on a SDTV. The difference is huge between the 2 TV types.

    I guess anyone who is reading this should seriously consider getting an HDTV before or shortly after getting your next gen system(s). You will never get the full next gen experience without one. My favorite purchase ever is my 50″ HDTV. At 28 years old that is saying something.

  • The difference with Microsoft is that they’re a near-monopoly. And you’re kidding yourself if you believe Microsoft doesn’t use that power as ruthlessly as it can get away with. So when Microsoft bundles something it’s a big deal because it makes it very hard for competitors.

    Sony and Toshiba is different. Though the company sizes are not equal, the fight is definitely a lot more fair. Bundling a BD player in the PS3 is way different than starting IE7 on Microsoft’s search page.

  • And while gaming may take in a small percentage of income, because the margins are so high, it actually accounts for a very large chunk of Sony’s operating profit.