Interesting Article about Sony (and VGCharts sighting)

[Erik Aston]

HD-DVD is nothing. The fact that dismal PS3 sales have so quickly and totally crushed HD-DVD highlights how small and insignificant this HD format war was.

The problem is surplanting DVD. They cannot surplant DVD until they bring Blu-Ray players down to a reasonable price. The idea was that by selling a high volume of PS3's, they could aggressively cost reduce Blu-Ray and bring it down to a mass market price. In terms of cost-reducing Blu-Ray, there's a big difference between the 20-30 million PS3's over 4-year lifespan that PS3's current sales point towards, and 120 million units over 6-7 years and an eventual 10 year lifespan, which I think SCE literally thought was guarenteed.

Remember: People bought DVD because it was easy to use versus VHS. No rewinding, disc can be cued up anywhere (which is practically necesary for TV shows or bonus content), and discs can be played in multiple devices (standalone players/PS2/PCs). Blu-Ray doesn't have convenience advantages over DVD.

What's more, HDTV adoption is due to convenience and style as well--big screens which don't take up much space. PS3 and 360 sales are low, Blu-Ray and HD-DVD sales are lower, and most broadcasts are not yet HD, yet HDTVs are selling faster and faster. Clearly its not the extra pixels that people are most interested in.

So no, DVD-level adoption is not automatic. For this snowball to get started, the price of Blu-Ray is going to have to come down alot before it matches the value people put in extra pixels. And in the time being, more convenient options could come along. Upscaling is very convenient for those who value the pixels but don't want to rebuy their collections. Digital distribution isn't here yet, but Apple TV is highly competitive with both HD formats already.

If the current low PS3 sales are enough to get the snowball started, you have to question if there was a way to start the snowball without sacrificing PS2's position in the gaming market.