Sony is curently going all out in pushing its new Blu-ray disc (BD) format, which is capable of holding several times the data of existing DVDs. One tactic that it is using to get Blu-ray in to people’s living rooms is by employing BD as the format of choice for its forthcoming Playstation 3 (PS3) console. If a PS3 owner already has a Blu-ray player in their home, it becomes an obvious choice over rival format HD DVD. However good an idea this might seem, Sony appears to have a bit of a conflict of interest on its hands.
Sony announced today that the release of the PS3 will be delayed until November (although the simultaneous worldwide release means that European gamers will be able to get the PS3 earlier than expected!). The reason for the delay? The copy-prevention technology in Sony’s Blu-ray disc (BD) format still needs to be finalised. This extra waiting time (for Japanese and American markets, at least) gives console rivals Microsoft and Nintendo a bit more time to build market share, all for the sake of incorporating Blu-ray.
While this does put Sony at a slight disadvantage, I don’t think it’s the main issue that will bother consumers, as PS3 will still be out in time for the all-important Christmas period. The main issue will most likely be the cost of the PS3 as a result of incorporating BD technology. If a stand-alone Blu-ray player costs, say £500, then presumably a Blu-ray player with a powerful games console on top will cost even more, surely putting the cost of a PS3 above what most people will pay for a games console.
Otherwise, Sony will have to take a loss on each PS3 sold, which is what Microsoft did to get their Xbox console established, and they have repeated this loss-making tactic with their follow-up console, Xbox 360, which launched last Autumn. The last I heard, Microsoft’s home entertainment division (I can’t remember its offical name) was still at a significant loss of several million US dollars.
In their previous generation console, the Playstation 2 (PS2), Sony made a real success of including a DVD drive. As well as providing a superior format for holding lots of game data, the fact that the £300 console was also a DVD movie player was a big selling point (at the time, DVD players were still relatively expensive). The PS2 is acknowledged as helping the uptake of DVD as a common video format.
This is presumably why they believe they can pull off the inclusion of Blu-ray in the PS3. However, there are some significant differences. Firstly, DVD was four years old when the PS2 launched, so had already established a degree of acceptance in the movie market. It was also the de facto standard for digital movie distribution, as it had no competition.
Blu-ray is only launching this year, around 6 months before the PS3, and this time there is a competing format with HD DVD entering the market at virtually the same time. The issue of cost also comes up again — a DVD player surely cost far less to include in 2001 than a brand new Blu-ray player will this year. Discs will also be more expensive so early in the format’s life cycle.
Depending whether Sony launch a very pricey console (surely £400+?), decide to take a loss on each console, or a bit of both, there’s a very good chance that they will see either their home console market share (currently around 70%), their profits, or both, eroded for the sake of sneaking Blu-ray players in to people’s homes.