Alternative distribution to optical disks : SSD, cards, and download*

[dobwal]

You think making your own memory is somehow more profitable than buying it from the large suppliers. It's not a rational point of view.

Its is, if you plan on becoming a large supplier. The savings on one's own product would be icing on the cake especially for MS because its memory demand would be only a fraction of the overall production.

We shouldn't assume that MS's potential jump into any large hardware business with a portfolio full of clients will be done with the sole aim of only serving its own products.

MS is mostly in the business of servicing other businesses (this makes up the bulk of their revenue). Its mostly software based but MS wants to expand into the hardware business. Selling memory is not a huge stretch for MS, a lot of its current clients are in the business of buying memory.

 

[Deleted member 11852]

Its is, if you plan on becoming a large supplier. The savings on one's own product would be icing on the cake especially for MS because its memory demand would be only a fraction of the overall production.

Is anybody making significant profits manufacturing nothing by consumer level NAND? It's a rhetorical question, the answer is no. The NAND fabrication business consists of Samsung, Toshiba, SanDisk, Micron, SK Hynix and Intel. Any other name you see is buying from one these fabricators or has a borderline invisible share of the market. All of these companies have more diverse fabrication portfolios (even SanDisk) and NAND production is leveraging their other expertise and infrastructure and markets.

I can't see how anybody could produce just NAND and nothing else and make any money.

 

[dobwal]

Is anybody making significant profits manufacturing nothing by consumer level NAND? It's a rhetorical question, the answer is no. The NAND fabrication business consists of Samsung, Toshiba, SanDisk, Micron, SK Hynix and Intel. Any other name you see is buying from one these fabricators or has a borderline invisible share of the market. All of these companies have more diverse fabrication portfolios (even SanDisk) and NAND production is leveraging their other expertise and infrastructure and markets.

I can't see how anybody could produce just NAND and nothing else and make any money.

Well I am not talking just NAND. MS's own memory needs revolve around more than NAND or the Xbox. Plus, with MS's client list and its big war chest, why should it shoot for a specific market or just itself as a client?

Limited to a specific memory type and product, getting into the memory business makes no sense. But buying out someone like Micron because MS wants to service its own business as well as others may make a lot of sense.

 

[Lalaland]

Well I am not talking just NAND. MS's own memory needs revolve around more than NAND or the Xbox. Plus, with MS's client list and its big war chest, why should it shoot for a specific market or just itself as a client?

Limited to a specific memory type and product, getting into the memory business makes no sense. But buying out someone like Micron because MS wants to service its own business as well as others may make a lot of sense.

No.

Why doesn't Ryanair make jet aircraft, they are the world's largest operator of mid size regional jets?
Why doesn't Boeing make jet engines?
Why doesn't Ford mill it's own steel?

People use sub-contractors for parts because when your entire business is making widget X, widget X is produced at the lowest cost possible. When widget X is only a minor part of your cost structure it's impossible to maintain that focus. MS is as likely to start making NAND or any semi really as Ford are to get back into milling steel. Continuing the Ford metaphor you'd be surprised how few of the parts of a modern vehicle are made by the company whose badge adorns the bonnet.

MS just burnt $7,500,000,000 on firing 7,500 employees and admitting that phones were a waste of their time can you imagine the markets response to them turning around and going 'we're spending $XX,000,000,000 on making more h/w!'.

 

[Deleted member 11852]

MS just burnt $7,500,000,000 on firing 7,500 employees and admitting that phones were a waste of their time can you imagine the markets response to them turning around and going 'we're spending $XX,000,000,000 on making more h/w!'.

Not to mention Microsoft's $6.19Bn write off of aQuantive in 2012. And just to show it's not just Microsoft who should be thinking twice before opening their giant wallet, Google's massive losses from acquiring Motorola.

 

[dobwal]

No.

Why doesn't Ryanair make jet aircraft, they are the world's largest operator of mid size regional jets?
Why doesn't Boeing make jet engines?
Why doesn't Ford mill it's own steel?

People use sub-contractors for parts because when your entire business is making widget X, widget X is produced at the lowest cost possible. When widget X is only a minor part of your cost structure it's impossible to maintain that focus. MS is as likely to start making NAND or any semi really as Ford are to get back into milling steel. Continuing the Ford metaphor you'd be surprised how few of the parts of a modern vehicle are made by the company whose badge adorns the bonnet.

MS just burnt $7,500,000,000 on firing 7,500 employees and admitting that phones were a waste of their time can you imagine the markets response to them turning around and going 'we're spending $XX,000,000,000 on making more h/w!'.

Samsung makes memory. It also makes products that make use of that memory.
Sony makes camera sensors, It also makes products that makes use of those sensors.
Microsoft is in the cloud business. It also produces products that makes use of that service.

Pointing at a few businesses that sources parts from outside sources proves nothing because there are companies that do the opposite.

There are plenty of companies engaged in vertical intergration. Intergrating all potions of one supply chain probably doesn't makes sense. But portion of the supply may be justified by cheaper production costs. Ultimately, it comes down to the circumstances of each case.

And the reason MS burnt 7.5 billion is because a large part of Nokia revolved around feature phones, a dying business (MS still sells 10s of million of feature phones a quarter whose volume is falling). MS is still in the smartphone business. Risk is a part of business. MS would have no cloud service or surface business if it locked up its wallet everytime a venture went south.

 

[Deleted member 11852]

Samsung makes memory. It also makes products that make use of that memory.
Sony makes camera sensors, It also makes products that makes use of those sensors.

Because Samsung and Sony can make this work does not mean that Microsoft can. Google bought Motorola and, on paper at least, had everything they needed to make killer Android phones that would disrupt the market except that didn't work out and it cost Google billions of dollars.

 

[dobwal]

Because Samsung and Sony can make this work does not mean that Microsoft can. Google bought Motorola and, on paper at least, had everything they needed to make killer Android phones that would disrupt the market except that didn't work out and it cost Google billions of dollars.

You're right. There are no guarantees that MS can make it work but there were no guarantees for Samsung and Sony at the start either. Its a matter of execution.

Google bought Motorola for patent purposes. Motorola was losing money left and right and Google didn't do anything to give a more advantageous position to Motorola in the android market. Motorola didn't even secure production of a Google's Nexus phone (Google's flagship device) until after Google decided to sell it.

 

[MrFox]

They should invent something... like... something that would cost very little to produce in huge volume, not encumbered by industrial processes patents, doesn't require any risky R&D, doesn't require tens of billions to build fabs, minimal infrastructure requirement, a long term roadmap managed by an industry consortium, a proven copy-protection, and by far the lowest cost per GB anywhere in the foreseeable future of any distribution media. If all three gaming consoles use it and it's embraced by the home video market, that would be a pretty good distribution media.

They could use fricking lazer beams and a stamped piece of cheap plastic. Like Holodisc, except that it exists.

Or they could also use flash carts that costs 20 times more.... BUT WHY !?!?!?

 

[AzBat]

Instead of NAND Microsoft needs to get into this industry instead...

Just buy the biggest manufacturer of plastic credit, debit & gift cards.

Tommy McClain

 

[eastmen]

Instead of NAND Microsoft needs to get into this industry instead...

Just buy the biggest manufacturer of plastic credit, debit & gift cards.

Tommy McClain

even if they went completely DD they wouldn't even make the list of top plastic manufacturers.

But stores love those things , you can fit so many in a tiny space and considering they cost a few cents each losses on them are non existant.

 

[Deleted member 11852]

Google bought Motorola for patent purposes. Motorola was losing money left and right and Google didn't do anything to give a more advantageous position to Motorola in the android market. Motorola didn't even secure production of a Google's Nexus phone (Google's flagship device) until after Google decided to sell it.

Google's acquisition of Motorola was subject to regulation approval (and any Microsoft acquisition would be) and approval was only given if Google firewalls Motorola's operations so as not to give them an unfair advantage. But they did transfer a bunch of their own people in at the start to give it the best possible chance of success.

There is a distinct possibility, because of Microsoft's monopoly in desktop operating systems, that any attempted acquisition of a fabricator may only be approved on similar terms. Having Microsoft control desktop operating systems, have control of signification semiconductor component supply and be a hardware manufacturer could be a conflict of interest for Microsoft's competitors.

 

[MrFox]

The problem is not the payment, it's the distribution.

They need to invest a trillion to give free broadband with unlimited data cap to everybody and distribute the games unencrypted. Everybody wins!

 

[dobwal]

Google's acquisition of Motorola was subject to regulation approval (and any Microsoft acquisition would be) and approval was only given if Google firewalls Motorola's operations so as not to give them an unfair advantage. But they did transfer a bunch of their own people in at the start to give it the best possible chance of success.

There is a distinct possibility, because of Microsoft's monopoly in desktop operating systems, that any attempted acquisition of a fabricator may only be approved on similar terms. Having Microsoft control desktop operating systems, have control of signification semiconductor component supply and be a hardware manufacturer could be a conflict of interest for Microsoft's competitors.

One of the biggest issues with antitrust organization was the patents Google acquired from Motorola.

This is a quote from a justice dept's press release on the purchase.

“After a thorough review of the proposed transactions, the Antitrust Division has determined that each acquisition is unlikely to substantially lessen competition and has closed these three investigations. In all of the transactions, the division conducted an in-depth analysis into the potential ability and incentives of the acquiring firms to use the patents they proposed acquiring to foreclose competitors. In particular, the division focused on standard essential patents (SEPs) that Motorola Mobility and Nortel had committed to license to industry participants through their participation in standard-setting organizations (SSOs). The division’s investigations focused on whether the acquiring firms could use these patents to raise rivals’ costs or foreclose competition."

Samsung is a significant player in the components markets and so is Sony. MS wouldn't be doing anything other than what others are already doing. Would MS come under scrunity? Yes. But that because of its size which allows for potential abuse in any market MS enters. Literally anything other than really small purchases is going to warrant scrutiny and has the potential for antitrust issues.

 

[-tkf-]

It's going to be interesting to see if the Current Consoles will be able to support BLU-RAY UHD via a Firmware upgrade, in any case we now have a Blu-Ray spec with 100GB support that is likely to see the light shortly.

Blu-Ray UHD
http://www.projectorreviews.com/home-theater-and-projectors-the-technical-side/countdown-to-ultra-hd-blu-ray-introduction/
3840 x 2160 (Rec. 2020 10-bit depth HDR) up to 60hz , 66GB discs (100GB 3x Layer in spec), HEVC, All the new audio codecs.

And then there is the Procssing demands, everyone here knows the amount of work that went into the HD-DVD player on the 360, will a h.265 encoded movie with the above specs be a challenge? Among the things that i would think would require some heavy CPU power is the support for older TV's. And maybe it is here that the consoles could differ and compete in quality:

Since virtually no current UHD-TV nor any 4K/UHD projector can support these enhancements, the Ultra HD Blu-ray players will process the video back to SDR and Rec. 709 for delivery to such existing 4K/UHD display devices. Thus, with such current and previous generation 4K/UHD displays, you will get the benefits from the 2160p resolution, perhaps also from the 10-bit depth, but not the increased dynamic range nor the expanded color space. Some next generation UHD displays, a few of which will be appearing shortly, will be able to support some level of HDR and expanded color space enhancements.

 

[eastmen]

Well rumors are pointing to a xbox one mini with no bluray drive. But I recall there being debates about the one having h.265 support

 

[Deleted member 11852]

I dont see it as happening because many seem to be stuck in the past or suddenly have absolutely horrible internet services.

So people who once done with a game and want to sell it so as to make the next game they buy a little cheaper are "stuck in the past" ? Not everybody has the disposable income to play the games they would like too

Unfortunately I can't see any console digital only future which wouldn't result in less games for some people to play. Cheap arse bargain bins will largely disappear and there's no guarantee that lending and ownership transference (if they even happen) will be on the same terms that are for discs. Given the inherent greed of game publishers (evidenced by increasing micro transactions and advertisements creeping in), I'm not holding my breath for some altruistic policies in this regard.

I'm not blind to the advantages to digital purchases either, I estimate my digital purchases outnumber my disc purchases by about 2:1 but I can see how digital only may be problematic for other people.

 

[Clukos]

It is very convenient for publishers and console makers alike. Less manufacturing costs and at the same time elimination of used sales market. On the other hand it requires an internet connection which may decrease the potential customers in less developed countries, which may or may not be a problem. It also offers more direct control over the price of the product. I am sure they want to go all digital, what i am not sure of is how consumers will accept that move. Personally, if it means similar prices and discounts to Steam i am all in for it; and you can release special/collectors edition which provide a digital code for retailers as well (like how Halo 5 does it).

 

[Deleted member 11852]

It is very convenient for publishers and console makers alike. Less manufacturing costs and at the same time elimination of used sales market.

There are pros and cons for both users and publishers but I've not seen any evidence that digital distribution is cheaper than punching out discs. Mass disc production is cheap, like sub $1 cheap. The relative costs of making available a 20-50Gb download to several million people for launch is expensive. I don't know any CDN distributors that operate on a charity basis.

 

[cheapchips]

There are pros and cons for both users and publishers but I've not seen any evidence that digital distribution is cheaper than punching out discs. Mass disc production is cheap, like sub $1 cheap. The relative costs of making available a 20-50Gb download to several million people for launch is expensive. I don't know any CDN distributors that operate on a charity basis.

That sub $1 cost adds up if you want to fill shelves. Does that include packaging and distribution?

As a small/indie pub you won't get shelf space anyway. Pretty much anything but the years big hitters struggle.

Digital makes the inventory cost go away. Discovery is obviously still an issue but at least customers can find the product if they look for it.