Edit: oops, double post.

@ slorgnet - BR is by far and away the superior media format, and should there be a physical successor in the mass market to DVD, BR would be it (assuming that downloadable content doesn't gain wider appeal). I have kept an eye on the development of BR from the first mention of it as a next gen media storage format. Sadly i feel that BR and the PS3 have both been significantly let down by each other. Initially BR demonstrated the potential for upto 500Gb storage (through use of layers and advanced materials.) Over time as R&D moved towards production this was revised slowly down to it's current 50Gb (approx) capacity. The main reason for this (as far as i am aware) was that higher density storage was less successful in terms of production given the technology and it's latency was fairly large in terms of information transfer. So a compromise was reached that allowed for a good success rate, while still having the advantage of extra capacity. Now the compromise didn't have to be reached, however the use of the PS3 as the vehicle to sell the format, and the market pressure on Sony to not fall too far behind the eight ball with nintendo and microsoft (especially microsoft given their affiliation with HDDVD) was significant. So BR was rushed. BR then let the PS3 down after being rushed through cost. Additionally, the potential for BR as a DVD replacement media was never fully realised prior to release and it was left at HDDVD competitor levels instead of surpassing it. The videogame cycle of this gen (or next gen if you will) caught Sony out.

Wojtas - see my post on the BR/PS3 relationship. The PS3 is a mass consumer device, that from my point of view, was rushed out the door to support BR and enter the videogame fight for market share. This relationship between PS3 and BR moved what should have been a mass consumer device and successor to the PS2 out of the mass consumer market. Sony games division will suffer for this as a high end product that falls into mass consumerism after a time ends up being behind the eight ball with regards to third party support (example being iPod accessories vs accessories for any other technically superior MP3 player now aimed at the mass consumer market). Sony corp as a whole may see the final benefit out of BR though. This is yet to be decided, and the risk Sony is taking is huge (death of PS brand and loss of format war), however the long term gain could be equally as large.

BTW, my specialisation is aeronautical engineering, and technical human resource management in aviation. Analysis in this field is primarily based on systems analysis and implementation relating heavily to safety. System analysis is engineering jargon for "look at the bigger picture", and analyse the problem looking at a macro rather than micro level. Mass consumer markets and their behaviour is a hobby subject, as is psychology of both individuals and groups. The knowledge i have gainer from my job is suprisingly applicable to mass market economics.

Well we all know how betamax ended up. Somehow it has always been like this, that superior technologies never have a good beginning just like revolutionary ideas. It's true that Sony rushed blu-ray onto the PS3 and now they will probably pay the price. People accept small improvemnts without a blink but when something totally different comes up people usually alienate it. At least that's how i see it.

I too think you have a great analysis there, certainly a far cry from the typical first post =)

With that said I wish you had covered the other factors you mentioned as well. Understanding not only how these factors interact but how the ones that are done to death interact is vitally important to obtaining a clear picture of the entire market. Mentioning all the factors together gives a complete picture.

I guess what I am saying is that it is sort of like a science experiment and you are tracking the minor variables that nobody looks at much and ignoring the major variables that are studied to death. I think the major variables provide a great deal of context for the overall study regardless of angle.

Hopefully that made some amount of sense. In any case I want to reiterate that I enjoyed this analysis quite a bit so don't take this as a negative criticism, if anything it is quite positive with a suggestion tacked on =)

I'm going to be blunt at some points, don't be offended. I'm attacking your arguments, not you:

1- Consumers don't care how much storage those formats have. Most consumers don't even know how much storage those formats have. Consumers care about watching movies, and they care about price. The rest is absolutely secondary (by a far margin).

2- Of course Sony wants the PS3 to replace the PS2 as soon as possible. When a new console generation starts, the console makers are eager to see everyone flocking to it. It's just ignorant to say otherwise. The problem is that Sony can't make people do the switch, not while price is high and games are scarce and mediocre (with a few exceptions). In the meantime, the Wii/360/Wii60 are stealing potential audience from the PS3. Obviously, it's not what Sony planned.

3- Don't give me crap about what a "next-gen storage device" is or isn't. A "gen" is just a way to organize competing consoles by time periods. Having said that, what Microsoft was thinking (and well) was obviously that it needed to get its console out as soon as possible, and at a reasonable price. Does the opposite of those two things ring any *cough PS3 cough* bells?

What Microsoft probably thinks now is "the PS3 can keep its Blu-Ray discs filled with uncompressed audio, we'll keep our DVD-9 which is doing the job".

And the most important part of his post is the precieved consumer value through the various means.....

If a system has that, they have the public. It's what makes Wal-Mart so dang profitable. Everything's cheap, and a good value.

For all those passing welcomes and positive feedback thank you. Only one prob is that i have been a long time skulker around these parts, and while i don't post much (1st back in Jan/Feb i think), i only pipe up when i have something meaningful to add.

Sqrl - Having lurked in the background as a silent member for long enough (since the .org days) i am fully conversant with the other factors as i am sure most other here are. What inspired me to take the broader approach to the analysis was that after many a thread i had seen very few if any delve into the generic forces of mass consumer markets and their application to the videogame industry. What i might try and attempt is to draw the lines between the major factors affecting sales both from my first post and countless other threads attempting to analyse the sales situation. Such that the full bigger picture can be drawn. Difficulty of this is keeping it relatively short.

NJ5 - i agree that consumers don't care about storage, unless, the increase is percieved as significant. Your mum and dad shopper know that if they have a lot of files to back up on their home computer they will want to use DVDs as opposed to CDs. However what they see with the new HD formats is essentially a tweaked version of a DVD. It doesn't hit them as significant enough, unless they were to see HD side by side to SD so they don't really pay attention to the extra storage and advances made becuase it doesn't seem big enough, or justified enough to them. Product familiarity. Product familiarity is essentially what microsoft banks on year after year with windows. Linux has some fantastic OSs out there, that are free, legal, stable. Yet a free product can't seem to win against an otherwise expensive one, due to mass consumer familiarity with the later and an unwillingness to change without very good motivation to the former. This demonstrates part of the DVD to HD media format problem. People know DVD. Then they need to see the significant improvement, like the VHS -> DVD type.

Consider storage improvements over time for media (the fully sucessful ones); VHS -> DVD, and then thats it. Now look at it when you include all of the ones that tried to make it to mass market; Beta -> VHS -> LD -> VCD -> SVCD -> DVD. You can see evolution doesn't work, only revolution captures the mass market. Unfortunately as it currently stands i don't think BR or HDDVD are revolutionary enough to capture the mass market.

mrstickball - good to see someone else pick up on it. Perception is a powerful powerful thing. Especially when dealing with the mass market. Perception is reality, and perception of value (real or otherwise) is crucial.

"Give me a person and i will call them smart. Give me a crowd and i will call them stupid" - anon