Blu-ray versus HD DVD

May 28th, 2007, 15:16 Posted By: Triv1um

Entertainment giants are battling for domination of the next generation of DVDs but an outright win is an unlikely outcome, reports Kate Bulkley.

Via TheAge.com.au

If it was a Hollywood movie it would be a remake of Alien v Predator. On one side is the giant Sony corporation, which is backing the Blu-ray high definition DVD format by building it into its PlayStation 3 games consoles. Facing it across the global battlefield is Toshiba, backed by Microsoft and Intel, promoting the rival (and incompatible) HD DVD format.

The stakes are very high indeed for both companies. Yet Sony, the pre-fight favourite because it has the best-selling games console franchise in the world and the backing of seven Hollywood studios (basically all of the big ones except Universal Pictures), which have made their movies available on Blu-ray, is nowhere near delivering the early knockout blow it was hoping for.

Instead, early defections from the Blu-ray camp and lagging sales of PS3 consoles have blurred the picture of which format will win. Samsung broke ranks with Blu-ray last month by announcing it will make players that play both HD formats, following a similar move by LG. In addition, most analysts acknowledge that the PC manufacturers will play a key role in the format war - and having Microsoft and Intel behind HD DVD is significant. Neither of these Toshiba allies has shown signs of switching camps so far.

Meanwhile, PS3 sales in Britain, the European market where PS3 has had its most successful launch, were 165,000 in week one but fell to 28,000 in the second week, a trend that has been echoed in other markets as well.

Sony took a big gamble bundling the Blu-ray player with the PS3, resulting in delayed release and higher prices for the consoles. Ken Kutaragi, the "father of the PlayStation", recently paid the price and resigned as chairman and chief executive of the Sony Computer Entertainment unit.

With the sales of PS3 lagging, the new machines may not be the cornerstone of a recovery at Sony, with videogame-related losses for Sony's year ending in March expected to amount to $US2 billion ($2.4 billion) - twice the original expectations.

Sony has a lot riding on the success of the PS3, especially after it was wrong-footed in the music player market by Apple's iPod. It certainly doesn't want to have another Betamax or MiniDisc story, either. For Sony, the PS3 and Blu-ray are part of an important corporate move to regain its pre-eminence in the consumer electronics business.

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