Blu-ray win might be a score for PS3
Blockbuster move stirs up console biz
By TODD BISHOP
P-I REPORTER
Blockbuster's decision to focus on the Blu-ray high-definition movie format could be good news for Sony's PlayStation 3, but analysts stopped short of calling it a complete game changer in the console market.
The rental giant caused a stir in the movie business Monday with the announcement that it had chosen Blu-ray over the rival HD DVD format as it expands its stock of high-definition DVDs to 1,700 Blockbuster stores.
The move has implications for the video-game industry because of efforts by Microsoft and Sony to make their consoles multifaceted entertainment machines, capable of playing movies, music and other media. Sony bet big on Blu-ray by putting one of the drives into every PlayStation 3 -- hoping that consumers would be willing to pay a higher price as a result.
Sony charges $500 and $600 for the PlayStation 3. The primary versions of Microsoft's Xbox 360 cost $300 and $400. Nintendo's Wii sells for $250. Microsoft, which supports the HD DVD format, offers an HD DVD add-on for Xbox 360 for $200.
The PlayStation 3 is in third place so far in U.S. market share among the new game consoles. The Xbox 360 leads in cumulative sales, thanks to its yearlong head start, but the Wii has been ahead in monthly unit sales.
The uncertainty over the format wars has prevented some consumers from paying the premium for the PlayStation 3, said Michael Pachter, an analyst with Wedbush Morgan Securities.
"You don't want to buy a Blu-ray player and then find out that HD DVD is the standard," Pachter said.
He said Blockbuster's decision could make those consumers more comfortable buying the PlayStation 3. Sales of the PlayStation 3 could improve somewhat as a result, he said.
However, he added, the real impact won't be felt in the console market until more people buy high-definition monitors to take advantage of the improved visual quality of next-generation DVDs.
Asked about Blockbuster's move, Microsoft said in a statement that, rentals aside, the HD DVD format leads Blu-ray in sales of stand-alone players and the number of high-definition movies bought per machine, known as the "attach rate."
"This is important, since over time, high definition DVDs will be an owner's market, not a rental market -- just like they were for DVDs," Microsoft said in the statement. The company added, "Simply put, there is a key difference between performance in a rental test market and the actual movie sales at retail, an area that HD DVD continues to lead in."
And one analyst warned not to read too much into the Blockbuster news from the perspective of the game console market.
"It's certainly an important win for the Blu-ray folks over HD DVD, but it's not likely to impact the console wars at this particular point," said Michael Gartenberg of Jupiter Research.
"For the most part, people buying consoles are still buying them primarily as game machines," not to play movies, he said.
Announcing its decision, Blockbuster said Blu-ray rentals are "significantly outpacing" HD DVD rentals at its stores.
Blockbuster didn't rule out HD DVD in the long run. The company says it will continue to offer HD DVD for online rental and in the 250 stores that now carry Blu-ray and HD DVD titles.
Matthew Smith, senior vice president of merchandising, said in a news release that it was "still too early to say which high-definition format will become the industry standard," noting that Blockbuster "will continue to closely monitor customer rental patterns both at our stores and online, so we can adjust our inventory mix accordingly."
Wedbush Morgan's Pachter acknowledged that Blockbuster could always change course, but he cited the investment the company will have to make to expand its stock of Blu-ray DVDs.
As far as Blockbuster goes, "It's pretty clear they just declared Blu-ray the winner," Pachter said.
The North American HD DVD Promotional Group told The Associated Press that it considered Blockbuster's decision flawed, based on limited market data that was skewed by the success of movies that were released in the Blu-ray format. The group says the company should have waited longer to more accurately assess consumer preferences.
To be sure, Blockbuster alone won't determine the outcome of the format wars. Among other things, online movie rental company Netflix offers movies in both the HD DVD and Blu-ray formats.
Blockbuster move stirs up console biz
By TODD BISHOP
P-I REPORTER
Blockbuster's decision to focus on the Blu-ray high-definition movie format could be good news for Sony's PlayStation 3, but analysts stopped short of calling it a complete game changer in the console market.
The rental giant caused a stir in the movie business Monday with the announcement that it had chosen Blu-ray over the rival HD DVD format as it expands its stock of high-definition DVDs to 1,700 Blockbuster stores.
The move has implications for the video-game industry because of efforts by Microsoft and Sony to make their consoles multifaceted entertainment machines, capable of playing movies, music and other media. Sony bet big on Blu-ray by putting one of the drives into every PlayStation 3 -- hoping that consumers would be willing to pay a higher price as a result.
Sony charges $500 and $600 for the PlayStation 3. The primary versions of Microsoft's Xbox 360 cost $300 and $400. Nintendo's Wii sells for $250. Microsoft, which supports the HD DVD format, offers an HD DVD add-on for Xbox 360 for $200.
The PlayStation 3 is in third place so far in U.S. market share among the new game consoles. The Xbox 360 leads in cumulative sales, thanks to its yearlong head start, but the Wii has been ahead in monthly unit sales.
The uncertainty over the format wars has prevented some consumers from paying the premium for the PlayStation 3, said Michael Pachter, an analyst with Wedbush Morgan Securities.
"You don't want to buy a Blu-ray player and then find out that HD DVD is the standard," Pachter said.
He said Blockbuster's decision could make those consumers more comfortable buying the PlayStation 3. Sales of the PlayStation 3 could improve somewhat as a result, he said.
However, he added, the real impact won't be felt in the console market until more people buy high-definition monitors to take advantage of the improved visual quality of next-generation DVDs.
Asked about Blockbuster's move, Microsoft said in a statement that, rentals aside, the HD DVD format leads Blu-ray in sales of stand-alone players and the number of high-definition movies bought per machine, known as the "attach rate."
"This is important, since over time, high definition DVDs will be an owner's market, not a rental market -- just like they were for DVDs," Microsoft said in the statement. The company added, "Simply put, there is a key difference between performance in a rental test market and the actual movie sales at retail, an area that HD DVD continues to lead in."
And one analyst warned not to read too much into the Blockbuster news from the perspective of the game console market.
"It's certainly an important win for the Blu-ray folks over HD DVD, but it's not likely to impact the console wars at this particular point," said Michael Gartenberg of Jupiter Research.
"For the most part, people buying consoles are still buying them primarily as game machines," not to play movies, he said.
Announcing its decision, Blockbuster said Blu-ray rentals are "significantly outpacing" HD DVD rentals at its stores.
Blockbuster didn't rule out HD DVD in the long run. The company says it will continue to offer HD DVD for online rental and in the 250 stores that now carry Blu-ray and HD DVD titles.
Matthew Smith, senior vice president of merchandising, said in a news release that it was "still too early to say which high-definition format will become the industry standard," noting that Blockbuster "will continue to closely monitor customer rental patterns both at our stores and online, so we can adjust our inventory mix accordingly."
Wedbush Morgan's Pachter acknowledged that Blockbuster could always change course, but he cited the investment the company will have to make to expand its stock of Blu-ray DVDs.
As far as Blockbuster goes, "It's pretty clear they just declared Blu-ray the winner," Pachter said.
The North American HD DVD Promotional Group told The Associated Press that it considered Blockbuster's decision flawed, based on limited market data that was skewed by the success of movies that were released in the Blu-ray format. The group says the company should have waited longer to more accurately assess consumer preferences.
To be sure, Blockbuster alone won't determine the outcome of the format wars. Among other things, online movie rental company Netflix offers movies in both the HD DVD and Blu-ray formats.
If this has already posted don't crucify me . Just delete the thread and...go do long division or something :lol: (jk)
This is a loss for HD-DVD . How big a loss ? I dunno but its another weapon in the Blu-Ray arsenal and a boost for Sony and the PS3 .
As for HD-DVD , well its one foot in the grave .
