You are pretty much right, of course people are going to whine and complain, but the same happened with VHS, CD and DVD. Maybe I still want to run Records on my old 45, can someone please point me to the latest Weezer album on Vinyl? Oh right, it was forced out of the market by a format that could leverage more profit for the industry.

Blu-Ray will hit the same level of use as DVD, America just switched or is about to switch to a pure Digital TV format and leave Analogue behind, HDTV's are literally selling like gang busters, it might have cost the PS3 in the beginning but Sony is going to reap massive rewards for this. Even at a 20-30% royalties.

oh well. I know this post was made in vain.

You would think that would only be fair. But then again all is fair in love and console war.

I'm not arguing that, and you weren't either, at least originally. The original discussion was about Sony's profitability. You claimed that Blu Ray would recoup 3 billion dollars in losses for Sony; that's stated clearly and concisely in your original post. When I challenged this notion, you changed topics. Let's recap:

Tombi: Sony will make 3 billion dollars in losses back from Blu Ray royalties.
Bodhesatva: Are you sure? What data do you have to support this?
Tombi: Blu Ray will do well in the format war.

Nice sidestep there, Tombi. So we agree that there is no way to know precisely how much Sony stands to gain from Blu Ray patents? And we agree it's likely that whatever royalties do exist will be shared amongst the Blu Ray Disc Association's Founding Members?

I'd assume those royatlies are distributed inequally, with those carrying the largest marginal risk (such as Phillips and Sony) garnering the largest marginal benefit.

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See, I disagree with this. It's based on an overly materialistic (almost quasi-Marxist) view of how markets work. I don't believe that people are blind, gullible fools who can be easily controlled by giant corporations (at least, not all of the time!) I think that people largely act as rational consumers in free markets, spending their money on things that they genuinely want. That's not to say they spend money on things that they NEED, per se, but that they spend it on things they truly do want. And people aren't as foolish as many would like to believe.

For example, DVDs didn't take off because movie companies successfully gulled people into buying them. They succeeded because the technology was vastly superior to the old formats, and offered advantages that anyone could see. ipods/MP3s succeeded for the same reason, even though the actual audio quality was lower than with CDs. Perhaps Blu Ray will prove to be just as successful; it's impossible to say at the moment. If Blu Ray suceeds, it will be due to a genuine desire on the part of consumers to upgrade to better picture and sound quality. It will not come about simply because the film companies forced it on the market. History is littered with many different products that corporations tried to force onto the public, and were rejected by consumers because they didn't meet their wants.

what do they grow!!!

Thats not good news for PS3 consumers.  All Sony and Microsoft platforms have been sold at an intial loss, thats nothing new.  What the losses mean for PS3 consumers is that Sony cannot buy new exclusives of note (as evidenced by SO4 and ES going to the Xbox 360, and DMC4, GTAIV and RE5 going multiplatform).  It also means that Sony cannot push the PS3 as hard as they had been, meaning less will be sold, meaning developers will have less reason to work on the platform.

Thats a vicious cycle, that in no way helps PS3 consumers.

Unless by "consumers" you meant people who do/will own a Wii or Xbox 360.

Who would think that a company would be stupid enough to overinvest in something that wouldn't work out in the end?

*checks thread title*

Oh wait...............

As pointed out by bumidan in another thread, the $3B in losses are at the Game Division level, of which PS3 is part of. $2B in FY2007, and $1B in FY2008, ending in Mar 08. So as he accurately pointed out, PS3 lost all of PS2 and PSP hardware and software profits in FY2007 and in FY2008, PLUS $3B more.

http://www.sony.net/SonyInfo/IR/financial/fr/07q4_sony.pdf

Now with holiday sales of the past year, Sony says that was enough to make the last half profitable. In other words, the PS3 losses did not completely wipe out the holiday profits of the PS2 and PSP. If they can do as well in reducing PS3 losses this year as they did last year, then the PS3 losses will match up with the PS2 and PSP profits, allowing the Gaming division to break even for the entire year.

While the manufacturing cost of $350 being floated about is less than the retail sales price, there are a lot of non-manufacturing costs as well. Overhead cost, advertizing, freight charges, finance costs (where the retailer buys the PS3 from Sony but doesn't have to pay the invoice for 45 days or so).

For those wanting to know the liability side of Sony, $40B in current (

Agreed.

I would argue that quality has little to do with the reasons that cassettes beat records, CDs beat cassettes, MP3s beat CDs, and DVDs beat VHS.  In fact, MP3 players generally have lower quality sound than CDs.

What all of these winning formats have in common is convienence.  Portability and ease of use have increased with each format change.  Generally there is an increase in quality, but that is not the driving factor.

I don't believe that BluRay offers enough advantages over DVDs.  Sure you can fit a few more episodes or bonus features onto the disc, but the step up to the new TV and new disc player is pretty steep for a lot of people.

Earlier someone mentioned the switch to digital broadcasts in the US as a reason people will switch to HDTVs.  If your TV is hooked up to cable or satelite, the change will not affect your TV.  Only if you get your TV from bunny-ears (an antenae) will the change affect you.  Somehow, I don't think that people still getting their TV this way are in the market for a HDTV.