Of course it has not been worth it. They have had to lose billions on PS3 just to be the more dominant force in what is currently a niche market (which is what HD disc sales are whether Sony fan boys admit it or not). It is not as if it is only Sony that would get royalties. As far as I am aware Toshiba is the only one getting royalties from DVD yet I don't think they have made that much from DVD sales to make it not a nig deal for them to lose billions on the basis that they would recoup on royalties, etc and make billions on top.

I guess to answer the question without considering other factors you could say it is worth it on the basis that if Blu-Ray succeeds they could make more from royalties, etc than they would have from PS3 hardware and software sales. But you have to consider at what price the victory would have come. They have had to lose billions in the console market to achieve this victory. I think they would have been much more better off if they released PS3 without blu-ray. They would have made money on the PS3 rather than losing tons and they would have made money on Blu-Ray though less than they would now with blu-ray in PS3.

To llustrate my point with random sample numbers:

With Blu-Ray in PS3:

PS3 - loss of 100
Blu-Ray - profit of 120
Total Profit - 20

With no Blu-Ray in PS3:

PS3 - Profit of 50
Blu-Ray - Profit of 30
Total Profit - 80

I think it was worth it since in a bunch of years from now, hd movies will be standard, and if Blu Ray comes out on top that would be a big profit for sony.

so magically if sony hadn't put a blu-ray drive in the ps3, there would have been all these awesome games out for it and everybody would want one. the game drought still would have happened, people would have said, the ps3 is 400 bucks, the 360 is 400 bucks and the 360 has much better games. i will tell you, sony sold a lot of ps3s simiply as blu-ray players, because the ps3 was for a long time the cheapest and safest (as far as profile 1.1 and 2.0) bet. how many game devs have praised the blu-ray drive, quite a few i believe. ps3 sales would have sucked for the 1st year with or without blu-ray. keep in mind sony also lowered costs on SAL blu-ray machines because they were mass producing blu diodes for ps3, so it saved them some cash there. blu-ray has 9:1 lead in japan, 5:1 in australia, 3:1 in europe and 2:1 in the states, it will win the war. rumors are flying that wb is going exclusive to bd, it seems as if the ps3 is going to make a ton of royalties in the next gen or home media.. good move.

Well, Sony's stock price has been rising lately, so I personally don't see what the worry is.....meaning that if the professionals who do this kind of thing for a living day in and out - analysts - can't figure out that sony is making good decisions then I might as well reevaluate the idea of evolution as ludicrous.

no offense but you seem to disregard all the difficulties digital download is having

just to point a few

#1 bandwith problem ( this huge!)

#2 sound and picture quailties also related to bandwith problem.

#3 Consumer need to buy need equipments to send signal to their T.V

#4 Hard Drive can actually die without notice and say bye bye to your movies.

there are more problems for digital download to become mainstream, these just a few of the most difficulities I think they are having.

bottom line is we are still light years away from having digital download dominate the market.

By most accounts both formats are going to survive. Fishyjoe is correct in saying there is no accurate financial analysis currently available specifying how much money Sony stands to make from Blu-Ray, but their are a few important points to consider.

-Even if Sony wins the HD format war convincingly, it will take AT LEAST one year to complete this victory.

-It will take AT LEAST one more year after this to secure mass-market prices.

-Even then the reality is Blu-Ray's mass-market prices will not equal DVD's, because it requires end-users to own HD-capable televisions.

-At this point in time, it's quite possible that Sony AND Toshiba will LOSE money on the HD format war overall, as DVD is currently dominant, and by the time the format war is complete, internet distribution could be prevelant.

to eugene,
I dont have read the comments or even ur firts post (lol),
but I m sure of 1 thing :

it is your best thread so far !

let's not forget that this victory is not only caused by losing money in the console business, but if the PS3 fails to really get off the ground and start pulling huge numbers, then the Playstation brand will be severely wounded. The Playstation brand is one of Sony's most successful brands, it has made them billions and has kept them very profitable during times when other products have been less successful. Remember what happened to the Walkman, it used to be the brand for portable music players, but one successful competitor has completely destroyed the name and it's now just a niche player. The same thing could happen to Playstation if Sony aren't careful.

If Sony loses a couple of billion dollars on the PS3 in order to dominate the Hi Def format, then that's ok. But if they lose one of their most successful brands then it is most definitely not worth it.

Wow, BD is a lot closer to winning the war than most think. Warner is going to go BD exclusive here very shortly, and after there contract with M$/Tosh is up I would bet Paramount/Dreamworks go back as well. As for losing ,market share....there is a long way to go yet before we know that. The PS3 will have sold over 7 million in its first year, and will only increase sales as time goes on. Just because the Wii is selling like mad, and the 360 MAY sell more consoles than the Xbox did, doesnt mean that the pS3 has lost anything. They could still sell over 100 million consoles in its life span. The other consoles may compliment the PS3, but they are hardly stealing anything away from it.

I don't really believe that Sony would make more money off of Blu-Ray than they did off of the PS2 ...

Although there are a lot more movies sold than games, Sony makes a lot more off of the licencing fee from a single game than they will off of a single movie; and they will end up sharing the fees gained from movie sales with several stakeholders in the format (whereas they gain all of the money from the sale of a game).

I (personally) don't think anyone thought of this as an either-or scenerio though ... It is likely that Sony believed that they could leverage their market dominance in videogames to push the new Blu-Ray format, and when these devices are established their brand will be very strong and would move more HDTVs and receivers. The end result has been very different than this though, Blu-Ray has killed all chances the PS3 has at becomming the dominant platform which (in turn) which may have a negative impact on the Sony brand as a whole.