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Gadgets Microsoft Calm About HD DVD Defeat
Marcus Yam (Blog) - February 19, 2008 4:51 AM
Print E-mail del.icio.us 58 comment(s) - last by BZDTemp.. on Feb 24 at 3:02 PM
Microsoft comments on Xbox 360 HD DVD future, possibility of a Blu-ray Disc add-on

Amidst the recent barrage of stories regarding the future plans of HD DVD supporters Toshiba, Universal and Paramount, some may have overlooked Microsoft – another big power behind the ailing format.

The Xbox 360 is currently linked to HD DVD, as the console can attach to an add-on peripheral drive that enables the playback of HD DVD software. The drive, manufactured by Toshiba, also operates on a PC.

According to tracking firm NPD, the Xbox 360 HD DVD add-on drive accessory has sold a collective 269,000 units in the U.S., making for a 3.4 percent attach rate with the console. Examining that number against the total number of HD DVD players sold in North America, the Xbox 360 accessory accounts for more than one-third of all HD DVD hardware.

Regarding sales of the HD DVD peripheral, Microsoft said it was the “biggest-selling accessory” ever sold for the console – likely measured in terms of revenue. The HD DVD drive launched in 2006 for $199, dropped to $179 in July 2007, settling today at $129.

Despite the added functionality afforded by the HD DVD add-on, Microsoft appears unconcerned about the fate of the format’s effect on the Xbox 360.

“We do not believe the recent reports about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace,” Microsoft said in a statement. “As we've long stated, we believe it is games that sell consoles and Xbox 360 continues to have the largest next-gen games library with the most exclusives and best selling games in the industry.”

For now, Microsoft is taking a wait-and-see attitude regarding its biggest-selling accessory. “We will wait until we hear from Toshiba before announcing any specific plans around the Xbox 360 HD DVD player,” the statement read. “HD DVD is one of the several ways we offer a high definition experience to consumers and we will continue to give consumers the choice to enjoy digital distribution of high definition movies and TV shows directly to their living room along with playback of the DVD movies they already own.”

Such comments from Microsoft may draw attention to earlier conspiracy theories shared by director Michael Bay and 20th Century Fox’s president Mike Dunn.

Michael Bay, director of action blockbusters such as Transformers, accused Microsoft of sabotaging both high-definition disc formats. More specifically, according to Bay, Microsoft chose HD DVD to intentionally confuse the customer into giving up both optical formats for digital downloads – which Microsoft sells on its Xbox Live Video Marketplace.

“What you don't understand is corporate politics. Microsoft wants both formats to fail so they can be heroes and make the world move to digital downloads,” wrote Bay. “That is the dirty secret no one is talking about.”

Another possible alternative for Microsoft would be to offer a Blu-ray Disc add-on to open the Xbox 360 to the ability of playing both formats. Smarthouse cited supposed insiders at Microsoft saying that a Blu-ray Disc peripheral for the Xbox 360 is pending marketing and sales approvals.

Michael Ephraim, managing director of Sony Computer Entertainment Australia said in the report that the company would welcome Microsoft to with open arms to the Blu-ray Disc family. “We would welcome Microsoft to the Blu-ray stable,” said Michael Ephraim. “In fact it is quite logical for them as the PS3 has been very successful in driving consumers to Blu-ray. In fact we believe that it has done more to win the format war than traditional Blu-ray player.”

Microsoft responded, “It is premature to speculate about Blu-ray but we do know from market data that HD movie playback is not a primary purchase driver for consumers buying video game console. It continues to be games that drive purchase and that has consistently been a strong point for the Xbox 360 platform.”

The software giant never completely ruled out the possibility that it might someday support Blu-ray Disc, including on its Xbox 360 console.

At CES 2008, Microsoft corporate VP Jeff Bell told the media that the company always had open lines of communication with the Blu-ray Disc camp: “We've been talking to Blu-ray all along because we have the best piece of software in the business, called HDi. It is the backbone that powers interactivity in HD-DVD and we have that available to potentially partner with others.”

Albert Penello, group marketing manager for Xbox hardware, said that it would consider a Blu-ray Disc option should its consumer base demand it. “It should be consumer choice; and if that's the way they vote, that's something we'll have to consider,” he said.

Microsoft Europe’s Senior Regional Director, Neil Thompson, expressed similar sentiments in March 2007: “Whatever format wins it is highly likely we will offer a solution. The only debate is if you want to watch Blu-ray movies and pay the extra money for that feature. We prefer to offer the consumer choice.”

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It's official
By TechLuster on 2/19/2008 5:10:07 AM , Rating: 4
Toshiba just officially threw in the towel a few hours ago:

http://www.reuters.com/article/ousiv/idUST34593320...

I'm sad. With easier-to-manufacture (and hence cheaper) media and players, plus the ability to make standard DVD + HD DVD combo discs, I was really rooting for HD DVD (though I never invested in it).

Also, a part of me just doesn't like Sony's business practices (root kits, introducing Memory Stick media for no reason other than to screw unwitting camera buyers with high media prices, etc.).




RE: It's official
By Belard on 2/19/2008 5:32:47 AM , Rating: 4
The actual cost difference between blu vs Red media is less than 10cents a disc with blue costing more. But keep in mind that a single sided Blu disc holds almost as much info as a double sided HD-DVD. It is reasons like this that Blu was more supported by studios, besides other factors.

I'm not a fan of Memory stick, but I hated SmartCards even more. Oh well. And Sony got burned for the root kit... but still we have companies doing that (BioShock).

With more blu-ray hardware being made, it costs less to manufacture than HD-DVD. The difference here is that Toshiba sold their players below cost... They were losing about $200 per player.

The Combo discs DVD + HD were a pain like any other double-sided discs. More people hate them than not. You have to read the little tiny text to see what side you're playing.

Oh, and it added costs to the HD-DVD discs too for that "feature"...

I myself have not invest in either one... But now the rest of know what to buy.


RE: It's official
By TechLuster on 2/19/2008 7:41:24 AM , Rating: 4
First of all, here's Toshiba's official press release:

http://www.toshiba.co.jp/about/press/2008_02/pr190...

Now regarding your post...
quote:
The actual cost difference between blu vs Red media is less than 10cents a disc with blue costing more.

I was under the impression that dual-layer HD DVD's (30GB) were cheaper than single-layer Blu-ray (25GB), but I could be mistaken about that.
quote:
With more blu-ray hardware being made, it costs less to manufacture than HD-DVD. The difference here is that Toshiba sold their players below cost... They were losing about $200 per player.

I'd like to see some references for those facts and figures, 'cause I'm a little skeptical...
quote:
The Combo discs DVD + HD were a pain like any other double-sided discs. More people hate them than not.

Ok, I'm calling bullshit on this one. I've never minded DVD's with both full- and wide-screen versions on the same disc (reading the "little tiny text" just isn't that bad), and a single hi-def disc than can play in any DVD player (say, when you go over to a friend's place) was HUGE selling point to me.

But anyway, I know what you mean about Bioshock. I loved it on the 360, and it was really disappointing to hear about all the DRM-related problems people had with it on the PC.


RE: It's official
By Carl B on 2/19/2008 8:19:56 AM , Rating: 3
People hate/hated the discs because of their extremely high defect/failure rate relative to non-combo discs, not because of text or appearance.


RE: It's official
By sweetsauce on 2/19/2008 1:17:07 PM , Rating: 4
You should know by now that people who frequent this site aren't idiots who accept unconfirmed statements like that without proof. Provide links/proof or don't say anything.


RE: It's official
By Hiawa23 on 2/19/2008 8:52:53 AM , Rating: 3
I don't understand how some view the combo discs as a pain. I love em. You get the DVD version on one side & the HD version on the other. I think it's great, cause my HD player is in my gameroom, but all my other TVs in my home are standard def & have regular DVD players. I haven't bought a BR movie cause the only player I have is the PS3, & I really am fine with DVDs, but I am sure MS will offer a BR add-on at some point in the future. Not surprised by this at all.


RE: It's official
By Samus on 2/20/2008 10:17:20 AM , Rating: 2
Bluray won studio's because it has region coding. It has and never has been about price, red or blue lasers, or even capacity (over 3 hours of the highest bitrate VC-1 video can fit on HD-DVD, so what's 8 hours on bluray going to do for the consumer other than aid bootleggers?)


RE: It's official
By JamRockaz on 2/20/2008 1:27:53 PM , Rating: 2
I actually believe that price had a lot to do with the adoption of studios to the format: the players and media are very expensive so the average user can't become "bootleggers" as with DVDs and CDs. That I believe swayed a lot over to blue-ray. Have you seen the cost of a B-ray burner lately? you're looked at least 400 bones!!

Hopefully for us consumers the prices with fall fast and pretty soon. :)


RE: It's official
By BZDTemp on 2/24/2008 3:02:50 PM , Rating: 2
LOL

I challenge you to even find a price of a HD-DVD burner not to mention a place that were selling them :-)

At one time CD burners was 5 big ones plus you needed a PC costing something similar to handle the 600-700 MB with sufficient speed being able to do a continues 1x feed.

Blu ray burners will come down in price just as the media so surely this has nothing to say for the choice of one format over the other.


RE: It's official
By jhinoz on 2/19/2008 5:45:21 AM , Rating: 3
so now what are we going to argue about?


RE: It's official
By crystal clear on 2/19/2008 6:03:57 AM , Rating: 3
Ultra high prices !
Rip offs !

The rest others can add on


RE: It's official
By Belard on 2/19/2008 6:42:17 AM , Rating: 5
High prices? The Toshiba players were SOLD UNDER COSTS. They were losing almost $200 a player trying to build their market share.

Before BB & Walmart said NO to HD-DVD, the movie release schedule for HD-DVD is sad. WB has the MOST movies coming out for HD (if they continue to do so) - After American Gangster - nothing from Universal. After march, nothing from Paramount. These last two studios were pulling out of HD-DVD since the CES defection of WB.

Here is the list of titles:
http://www.avsforum.com/avs-vb/showthread.php?t=94...

As more players come into production, more people will buy them, the prices will become LOWER and we'll pay less.

Also more TOP end movies will be hitting BLU.


RE: It's official
By crystal clear on 2/19/2008 7:35:25 AM , Rating: 3
quote:
As more players come into production, more people will buy them, the prices will become LOWER and we'll pay less.


Thats wishful thinking-no guarrantees on this.

I wish/hope for the buyers your assesment is correct.

quote:
The Toshiba players were SOLD UNDER COSTS. They were losing almost $200 a player trying to build their market share.


Who gained by this ?

The buyers/consumers ofcourse-thats the point.
I recently posted a comment,titled...

Remember ! YOU commentators are buyers & NOT format promoters

So we should be more concerned with ourselves & protect our interest.
But I find many here(not you) are promoting the format(B.R.) openly with total disregard to the buyers.

I doubt very much the mainstream buyers who are so very price conscious will be convinced by your arguments.
Sell us a B.R. player & quality contents at affordable prices thats the message the buyers convey.

So after all the excitement comes the doom & gloom situation
of NO BUYERS !

Experience shows Sony is not & never was so anxious to cut its prices.
They cut prices like in the case of PS3 only when its a "do or die situation" or when its the last & the only option to survive.


So lets hear some real good news ...PRICE CUTS !


RE: It's official
By Belard on 2/19/2008 9:10:42 AM , Rating: 3
quote:
Thats wishful thinking-no guarrantees on this. I wish/hope for the buyers your assesment is correct.


Uh it happens, uh history. Proof:

CD players. Used to be $500+ in the 80s. I paid $300 for a 5-disc CD player.

VCRs = $1000+ in the 70s. $600~1000 for a Hifi in 1988. Nowadays they are $30.

DVD players = $1000+ when first introduced to the market. 10 years later, they are $30.

Blu-ray players have already come down in price... with the ability for mass adoption, they'll come down more so.


RE: It's official
By sweetsauce on 2/19/08, Rating: 0
RE: It's official
By Ringold on 2/19/2008 10:38:05 AM , Rating: 2
I was under the impression that there were supply-side constraints making production of the blu-ray's laser units expensive and low volume? If that is the case and they can't bump up volume and get prices on that component down, then no, retail prices probably wont drop.

And companies don't price one thing higher just to make up for losses elsewhere, unless one is a loss-leader used to attract another (like giving away a razor for free, then nailing you like a borrowed mule on blades).


RE: It's official
By sweetsauce on 2/19/2008 1:12:04 PM , Rating: 2
quote:
And companies don't price one thing higher just to make up for losses elsewhere
Stand-alone BR players
quote:
unless one is a loss-leader used to attract another
PS3 anyone?


RE: It's official
By Melric on 2/19/2008 12:16:30 PM