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Forums - Sales Discussion - Does the Wii prove that the HD razor/blade model is flawed?

jarrod on 28 December 2009
bdbdbd said:
@Maxwell: I have been pointing it out for a few years. I also made a topic about Sony not being able to drop the price of PS3 until BD players drop in price.

PS3 did affect on BD winning over the HD-DVD, so in the sense it likely did pay off in the long run. Although, we are talking about billions of discs sold and maybe even hundreds of millions of players sold, before money starts to come in (depending on how the royalties are split). But, what eventually lead to BD winning over HD-DVD was the studios choosing the platform.

Sony had to split BD royalties so many ways in order to bring other companies in, I have to question if it's even worth the sacrifice of the PlayStation business in the long run (physical media's days are numbered anyway).  They're not collecting the highest percentage of royalties even, Matsushitsa (Panasonic) is iirc.



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theprof00 on 28 December 2009
jarrod said:
bdbdbd said:
@Maxwell: I have been pointing it out for a few years. I also made a topic about Sony not being able to drop the price of PS3 until BD players drop in price.

PS3 did affect on BD winning over the HD-DVD, so in the sense it likely did pay off in the long run. Although, we are talking about billions of discs sold and maybe even hundreds of millions of players sold, before money starts to come in (depending on how the royalties are split). But, what eventually lead to BD winning over HD-DVD was the studios choosing the platform.

Sony had to split BD royalties so many ways in order to bring other companies in, I have to question if it's even worth the sacrifice of the PlayStation business in the long run (physical media's days are numbered anyway).  They're not collecting the highest percentage of royalties even, Matsushitsa (Panasonic) is iirc.

Usually those royalties only last for a certain number of years. Is there an up to date list of what each gets? (Not asking you to post one, just asking if you think there may be one.)



MaxwellGT2000 on 28 December 2009
Squilliam said:
MaxwellGT2000 said:
bdbdbd said:
@raygun: Wii has easilly 18 games i want to buy. That's to add to the more than 18 games i already own for it.

You know, you may not notice but you just pointed out the stupidity in Sonys strategy. Since you obviously want to watch BD; if PS3 didn't have BD player in it, you had bought a BD player to go with your 16 BD:s. Now Sony sold you a BD player they made loss with, instead of selling a standalone player that had been sold at a profit. Sounds like they lost money twice with selling you the PS3.

Interesting way to look at it, though Sony had a lot of money invested into Blu-ray so it had to trump HD-DVD, best way to do that is offer a way for people to get a multipurpose device that is significantly better than just a HD DVD player and so a PS3 sold at a loss to customers not only let them have HD movies but games as well.  A much better investment for consumers, and in turn, a way to keep a leg up on HD-DVD.

Panasonic is the one who really benefited from Sony's decision to put Blu Ray in the PS3 because they another significant patent holder and they didn't lose as much money getting the format onto its feet. Also its quite probable that Panasonic profited from Sony's decision as their patents are focused on the player technology itself so getting a lot of players out there is a lot of royalty payments to Panasonic whereas Sony's Blu Ray fabrication in only just approaching break even now with a LOT of money invested in plant capital which will still need to be depreciated over the coming years. Sony makes their royalty money more on selling a lot of Blu Ray discs.

As computers are moving away from Blu Ray as a medium for transfering files because online distribution and flash discs are taking off for their ease of use, they will not sell nearly in the same league the quantity of burnable write once or rewriteable discs as DVD.

So even if you say that Blu Ray was an effective part of Sony's Razor/blade strategy, they may not be the biggest winner from their own strategy.

Great points.  Though I've always viewed Blu-Ray as rather pointless especially with HD videos being streamed online and internet ready TVs around the corner, its just a matter of time before streaming becomes the big thing in movies as it provides many more advantages and the same quality.  Blu-Ray will end up being used when DL DVDs become cumbersome to put applications onto IE many discs, which may or may not be taken over by downloading said applications online.  

As of right now the best prospects for Blu Ray will be games as there are many game buyers that are collectors and like to trade/buy used, those people won't move over into digital distribution like the other fields and if game sizes increase next gen Blu-Ray might shine then, as for this gen Blu-ray has only minimally useful for certain games and even has hindered some by making it harder to have quick load times, and long installs for other games, to the point where I've had to "clean the fridge" on my PS3, which is typically a term reserved for cleaning out the half gig memory of the Wii when you max it out.

So I'm not saying Blu-ray was the smart move cause it might not pay off until next gen which may be a gamble but if the next Xbox and new Nintendo console start using blu-ray discs that could be good for Sony, if HD DVD had won all investments into blu-ray for Sony would have been a loss.  Personally I think Sony should have kept the PS3 with just DVD tech made a cheaper console, made blu-ray players really in demand by bringing a lot of studios over to make movies for it and beating HD-DVD without having to drag the PS3 into it.  Then save Blu-ray tech for next gen when games will need it more, plus the tech becomes better so they can load faster without installs.



MaxwellGT2000 - "Does the amount of times you beat it count towards how hardcore you are?"

Wii Friend Code - 5882 9717 7391 0918 (PM me if you add me), PSN - MaxwellGT2000, XBL - BlkKniteCecil, MaxwellGT2000

jarrod on 28 December 2009
theprof00 said:
jarrod said:
bdbdbd said:
@Maxwell: I have been pointing it out for a few years. I also made a topic about Sony not being able to drop the price of PS3 until BD players drop in price.

PS3 did affect on BD winning over the HD-DVD, so in the sense it likely did pay off in the long run. Although, we are talking about billions of discs sold and maybe even hundreds of millions of players sold, before money starts to come in (depending on how the royalties are split). But, what eventually lead to BD winning over HD-DVD was the studios choosing the platform.

Sony had to split BD royalties so many ways in order to bring other companies in, I have to question if it's even worth the sacrifice of the PlayStation business in the long run (physical media's days are numbered anyway).  They're not collecting the highest percentage of royalties even, Matsushitsa (Panasonic) is iirc.

Usually those royalties only last for a certain number of years. Is there an up to date list of what each gets? (Not asking you to post one, just asking if you think there may be one.)

Matsushita's royalties are due chiefly to the encryption and replication methods and copyrights.  They were also one of the first to work on the spec (after only Sony and Pioneer).  I don't think this is really something that's going to expire, Blu-ray is as much "theirs" as anyone's.



bdbdbd on 28 December 2009

@jarrod: That's why i put so large numbers into my guessestimate.

The effect of the BD player is hard to estimate, since it wasn't the only reason why:
Sony lost money with PS3
Sony lost marketshare with PS3

@Maxwell: Have you ever thought that lowering the Blu Ray royalties helped Sony to drop the price of PS3?



Ei Kiinasti.

Eikä Japanisti.

Vaan pannaan jalalla koreasti.

 

Nintendo games sell only on Nintendo system.

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johnlucas on 28 December 2009
Xoj said:
RolStoppable said:
It really cracks me up everytime I see someone post that Nintendo doesn't care for its core audience right after they released the game of the generation.

uncharted 2? O.o.

@johnlucas

 sony only had ps2 and some ps1 sales when the gamecube hit.

nintendo had Gameboy color, gameboy advance, gamecube and software sales for all platforms for profits.

and with all that nintendo made almost the same as the ps2.

However, both the PS1 & PS2 were the best-selling systems of all-time with libraries to match (well PS1 was only in home console terms before PS2 beat it).

And Nintendo had much less marketshare in every region though it was about a 60/40% split favoring Sony in Japan.

100 million consoles in the PS1, 120 million consoles in the PS2 (back then—now 140 million).
And they could barely outprofit Nintendo which was most likely propped up by its handhelds?
With that weak marketshare Gamecube had?

Like I said...Gamecube proved that the razor/blades model is flawed.

John Lucas



Words from the Official VGChartz Idiot

WE ARE THE NATION...OF DOMINATION!

 

MaxwellGT2000 on 28 December 2009
Xoj said:
RolStoppable said:
It really cracks me up everytime I see someone post that Nintendo doesn't care for its core audience right after they released the game of the generation.

uncharted 2? O.o.

@johnlucas

 sony only had ps2 and some ps1 sales when the gamecube hit.

nintendo had Gameboy color, gameboy advance, gamecube and software sales for all platforms for profits.

and with all that nintendo made almost the same as the ps2.

LOL no... no no... NO... obviously you didn't even click the link I provided the first time so here it is again.

http://www.vgchartz.com/forum/thread.php?id=57802

Please read it

                          Sony               Nintendo       

PS1/N64

1996         -$93,491,480          $752,481,940 (PS1 launches in 1995, Sony invests a lot to start up a gaming division)

1997         $508,270,950         $579,934,080

GBC 

1998         $954,197,760         $1,042,464,480 (GBC launches and pokemon starts hitting its stride)

1999         $1,073,609,660      $1,228,994,940  

PS2

2000         $693,184,350         $1,306,720,300  (PS2 launches, digs into the profits Ps1 made earlier that year) 

GC/GBA

2001         -$463,129,080        $767,354,820    (GC and the GBA launch, GC didn't take off as well as Nintendo had hoped)

2002         $664,149,150         $954,399,510

2003         $924,881,130         $821,985,200      (the one year Sony brings in more than Nintendo)

DS/PSP

2004         $599,416,860         $955,148,210     (DS and PSP launch, PSP sold at a loss as well, hoping their UMD format would take off and   become used by multiple forms of media)

2005         $402,344,400         $1,039,385,040

PS3/Wii

2006         $77,419,800           $799,588,650    (PS3 and Wii launch late in the year and PS3 almost destroys all the money PS2 raked in for the year)

2007         -$1,988,702,000     $1,934,765,440

2008         -$1,092,978,300     $4,277,791,600

2009         -$584,760,000        $5,552,630,000 

 

The numbers speak for themselves....



MaxwellGT2000 - "Does the amount of times you beat it count towards how hardcore you are?"

Wii Friend Code - 5882 9717 7391 0918 (PM me if you add me), PSN - MaxwellGT2000, XBL - BlkKniteCecil, MaxwellGT2000

theprof00 on 28 December 2009
johnlucas said:
Xoj said:
RolStoppable said:
It really cracks me up everytime I see someone post that Nintendo doesn't care for its core audience right after they released the game of the generation.

uncharted 2? O.o.

@johnlucas

 sony only had ps2 and some ps1 sales when the gamecube hit.

nintendo had Gameboy color, gameboy advance, gamecube and software sales for all platforms for profits.

and with all that nintendo made almost the same as the ps2.

However, both the PS1 & PS2 were the best-selling systems of all-time with libraries to match (well PS1 was only in home console terms before PS2 beat it).

And Nintendo had much less marketshare in every region though it was about a 60/40% split favoring Sony in Japan.

100 million consoles in the PS1, 120 million consoles in the PS2 (back then—now 140 million).
And they could barely outprofit Nintendo which was most likely propped up by its handhelds?
With that weak marketshare Gamecube had?

Like I said...Gamecube proved that the razor/blades model is flawed.

John Lucas

Are you really trying to downplay the success of the gameboy? I'm not discrediting your point, but the DS by itself has about as much sales as the ps2.

"Propped up by its handhelds"....



BoneyBoy on 28 December 2009

Yes. Yes it does



raygun on 28 December 2009

 

bdbdbd said:
@raygun: Wii has easilly 18 games i want to buy. That's to add to the more than 18 games i already own for it.

You know, you may not notice but you just pointed out the stupidity in Sonys strategy. Since you obviously want to watch BD; if PS3 didn't have BD player in it, you had bought a BD player to go with your 16 BD:s. Now Sony sold you a BD player they made loss with, instead of selling a standalone player that had been sold at a profit. Sounds like they lost money twice with selling you the PS3.

Stupidity??? You forget Sony was in a battle with Microsofts HD video format. Who knows, maybe the PS3s had a major part to play in blu-rays win, at one time I remember reading that 75% of the blu-ray players 'in the wild' were PS3s. Imagine if the PS3 didn't have blu-ray, would HDvideo have won the war? Then Sony would have really been in trouble. But they were smart and stuck a blu drive in their PS3 to help it win the format war.  So now with every blu-ray sold Sony makes a profit. Simple. And yet you call that stupid strategy?? And they haven't lost twice, jezzus! I have bought 18 games so far, and Sony wouldn't have gotten those sales if I bought a stand alone player, RIGHT?? Also, as far as attachment rates are concerned, the fact that some people bought a PS3 solely as a blu-ray player because it was the best player available brings down the 'attachment rate'. Yet they fail to factor in the profit from blu-ray video sales sold to people who just own a PS3, like me. Shouldn't blu-ray VIDEOS be counted as SOFTWARE sales in PS3's case?? What would that do to the 'attachment rate'? LOOK AT THE BIG PICTURE MY FRIENDS, THERE WAS NO FLAW IN THEIR STRATEGY!