Poll : XB360 owners. Are you getting HDDVD addon?

[BenSkywalker]

I would have to agree and add that I think some people are going to over-estimate the PS3 impact. No doubt that PS3 will have an impact, and it will be a decent one, just not ground shaking. Of course I am basing this off the fact that HD-DVD is cheaper to make/produce and cost usally drives volume...

Scales of economy tend to drive costs though. Let's look at this from a slightly different perspective.

Right now DVDs are flying off of shelves all over the world. Right now, BR movies are going for under $20 for the most part on Amazon. If we assume that the overwhelming majority of PS3 buyers are not making a purchasing decission because of BR movies at all, when SpiderMan3 hits and they have their PS3- what are they going to buy it for? What would you pick it up for? To me it is clearly no contest- for an extra few bucks I'll pick it up in its' HD form without question. Just take that portion of the population and assume that they are typical movie viewers and they happen to have a PS3- you are still looking at millions of casual viewers who are going to be buying some movies for their systems- why wouldn't they? Most people don't own hundreds of DVDs(I do) nor do those that do plan on replacing them all across the board(I do again) but even if we simply look at the new releases and how many people are going to be purchasing them, with Xmen3 and SpiderMan3 set to be on PS3 by the end of next year(when the PS3 should be hitting its stride) it is quite likely that they will sell more copies then there are standalone players of BR and HD by that point in time. Those are the kind of numbers that will have Universal forgetting its chosen platform. The money is simply too much to overlook.

If you recall, the running joke for the PS2's launch was that the killer app for it was The Matrix on DVD. Obviously the game lineup was incredibly weak, almost as bad as the 360's launch lineup, and yet it still sold millions and accelerated the adoption rate of DVDs by a considerable margin(whch is why the studios all cited the PS3 as a reason why they moved the BR way explicitly).

And conversely to lose, think about what its going to take to knock MS/Intel/Toshiba off the radar.

I'm fairly certain that I single handedly produced as many DVD drives as Intel and MS combined for the last ten years(that would be zero ). You have Toshiba versus Matsushita, Mitsubishi, Sony and Samsung. As far as MS and Intel are concerned- their leading supporters- Dell and HP- both are in the BR exclusive camp ATM. It doesn't matter at all if both MS and Intel want to see only HD drives in PCs, the major OEMs are all going BR. MS's only chance at making HD a viable platform is to make it the pack in drive with the 360- and they should have done that for launch.

 

[expletive]

I'm fairly certain that I single handedly produced as many DVD drives as Intel and MS combined for the last ten years(that would be zero ). You have Toshiba versus Matsushita, Mitsubishi, Sony and Samsung. As far as MS and Intel are concerned- their leading supporters- Dell and HP- both are in the BR exclusive camp ATM. It doesn't matter at all if both MS and Intel want to see only HD drives in PCs, the major OEMs are all going BR. MS's only chance at making HD a viable platform is to make it the pack in drive with the 360- and they should have done that for launch.

Its really not about drive production capacity and Toshiba would be aboslutely thrilled if demand for HD-DVD drives outstripped what they and NEC (and whoever else makes them) could supply. Its about MS's ability to drive demand for the software and youre in the minority if you dont count them as an industry 'giant' and capable of doing so.

Dell and HP exist because of Wintel, not the other way around. If MS chooses to exert their muscle with Vista and make it only work with HD-DVD, they could, but i dont think they'll choose to go that route and make it ugly.

 

[RobertR1]

HP is behind HD DVD also http://www.hp.com/hpinfo/newsroom/press/2005/051216a.html Amazing what 5 seconds of google can do for you.

With BD not adopting iHD whatsoever one has to wonder where they stand now. I'd get an update but most of Ben's comments are based off early to mid June 2005 info and a lot has changed since then. Ben, I highly recommed you browse avsforum for a bit and get a refresher.

Not only did BR come stumbling out of the gates but now they have insiders claiming that in the long term, we can expect 20% (apply PR padding as needed) of the titles to use BD50 where as the rest will be on BD25. So for atleast 80% of the time the "superior" format will actually be inferior. Oh and you have to pay 2x+ for it.

If the PS3 is as great as it's being hyped up to be (note that we have not actually seen how it handles BR movie playback and lets hope we don't have to rely on the PS2 for reference) then what incentive do other CE's have to even put out stand alone players, cheapest being $1000?

There's a lot more behing the doors action with HD DVD and Blu Ray than anything we've seen in a while. Definately much more than needed.

 

[Mythos]

That's all you got?!?!



Seriously though, EA and vivendi arent going to release anything but PS3 games on BR, and thats because they have to. We're still not at a point where PC game publishers regularly release games on DVD, much less BR. PC games will go to something like steam before BR imo.

That can push through...If these companies push through in their products and cross market the message will push through especially if HD-DVD does'nt have a voice. Some sampling is how retailers are currently pushing blu-ray.

 

[inefficient]

While I agree with the theory of your point, I think you are making an oversight. By the mid part next that stand alone HD-DVD players should have dropped "well" below the $400 price point. Given the fact that these standalone players should be able to come down on the cost curves much faster than the consoles can. And the cheaper they get the more they will sell...

Just remeber the only reason why Toshiba's HD-DVD player is $500 is because they are selling it at a loss. It not $500 because it cost half as much to manufacture as Samsung's. Some have estimated as much as a 30% discount compared to the component costs for their HD-A1 player. (link)

While Samsung is probably making as much 30% profit margin on each player. Samsung is in it for the profits, they could care less about the formats adoption rate. They are cashing in on the fact at they are the only option on the market right now. Once PS3 and other low cost options emerge this will change.

Unless Toshiba finds a major way to cut costs, and unless they want to keep losing money, I don't think you will see a $400 player anytime soon.

Because of this I'm going to assume that the actual BOM and manufacturing cost difference is most likely quite negligible. Certainly not the huge $500 difference like it would appear currently.

So the cost advantage of HD-DVD is certainly overstated. And possibly even a myth.

And don't forget economy's of scale. With Sony pumping out essentially millions of BR players every year, component costs will no doubt go down.

 

[Cobra101]

Well, I have a 360 but am getting a PS3 also.

So no point in getting the HD-DVD add-on for the 360.

 

[ssj-04]

Why are you guys getting this add on for? This add don't even come with an HDMI output, within 5 to 6 years this player will be useless and become notting more than a dvd player. For the price, I'm guessing around $200 the lease and $250 the most.

If you're going to compare this add on to the PS3 and to be fair, you guys should compare it to the $500 PS3 version. Since the $500 PS3 doesn't come with an HDMI output as well. If you think about it, M$ is actually ripping off there fans when charging more than $100 for the add on.

 

[Sis]

Just remeber the only reason why Toshiba's HD-DVD player is $500 is because they are selling it at a loss. It not $500 because it cost half as much to manufacture as Samsung's. Some have estimated as much as a 30% discount compared to the component costs for their HD-A1 player. (link)

If "selling at a loss" is the best argument you've got, then I've got some Sony stock to sell you.

 

[BenSkywalker]

HP is behind HD DVD also http://www.hp.com/hpinfo/newsroom/press/2005/051216a.html Amazing what 5 seconds of google can do for you.

Using that same level of observation Universal is behind BR too. That doesn't change the actual real world situation. Since that press release HP reiterated their stance behind BR which in the PC space quite frankly is the only standard that makes sense.

With BD not adopting iHD whatsoever one has to wonder where they stand now. I'd get an update but most of Ben's comments are based off early to mid June 2005 info and a lot has changed since then. Ben, I highly recommed you browse avsforum for a bit and get a refresher.

I follow all the news quite closely. A fringe group of enthusiasts will have no impact on the market at all- they are in a complete and utter delusional state if they think otherwise. LaserDisc and BetaMax v VHS the argument would have been entirely between the first two on AvS with the third being completely dismissed. Enthusiast desires have little impact in the mass market electronics industry the overwhelming majority of the time. It literally took an act of Congress to get HDTV pushed through.

Not only did BR come stumbling out of the gates but now they have insiders claiming that in the long term, we can expect 20% (apply PR padding as needed) of the titles to use BD50 where as the rest will be on BD25. So for atleast 80% of the time the "superior" format will actually be inferior. Oh and you have to pay 2x+ for it.

Good propaganda. Right now there is nothing stopping BR from utilizing h.264 on a single layer disc and doing exactly what HD is doing. Higher bitrate MPEG2 was desired by the studios to ease transitional costs; it is one of the long term benefits of BR from a business standpoint. As far as BR stumbling out of the gate- do you mean the first player paired with the first titles don't look that good? HD OTOH does? Wow, I'm sure that is going to end up making a huge difference three years from now when the general consumer actually knows what these formats are- the first window when HD can expect to hit anything remotely close to reasonable sales numbers if it still exists. Do you think that anyone is going to care in a year what the launch situation was like? Maybe on AvS they will, but the market won't.

The PS2 in terms of launch was in a significantly inferior state compared to the Dreamcast. Due to marketplace realities the DC never stood a chance. Same thing here. On launch day it is likely that the PS3 will sell more units then HD and BR will sell in their first eighteen months on the market combined. Not the launch timeframe or first six months- day one. I don't think the posters on AvS quite understand the numbers that are at work here if they see HD as having a viable shot.

If the PS3 is as great as it's being hyped up to be (note that we have not actually seen how it handles BR movie playback and lets hope we don't have to rely on the PS2 for reference) then what incentive do other CE's have to even put out stand alone players, cheapest being $1000?

At that price point they don't. Scales of economy come in to play with drive costs. The PS3 works as a Trojan Horse to create the installed base and bring up a library of titles and to consume shelf space. The major players are happy as they are still getting royalty kickbacks waiting for the core components to hit a reasonable price point at which point they start pushing hard with their set top models. This is no brainer execution. Samsung hits early, takes advantage of those willing to shell out the big bucks and rake in the margins while trying to establish themselves as the market leader for BR players while the other side is dealing with no margins or losses trying to subsidize their format. BR group has Sony to handle their subsidy costs.

There's a lot more behing the doors action with HD DVD and Blu Ray than anything we've seen in a while. Definately much more than needed.

It is the same all the time in every indsutry. Proctor&Gamble are absolutely notorious for the stuff they pull- it is how the world works. For the errr, 'format wars' you have a couple of little kids going up against an army of adults. Top to bottom the deck is totally stacked against HD and heavily. LG just pulled the plug on their dual format player altogether- and made a PR statement to boot. The back door dealings are a large part of why HD stands no chance. Expect the big guns in the electronics industry to start playing hard ball if HD makes more then a very miniscule bump in the market- reducing costs to retailers who agree to support only BR etc- everything is against HD right now in terms of the market. If they had been the built in drive for the 360 things would be enormously different then they are, but that didn't happen.

This has nothing at all to do with what I want to see happen to reiterate that point, it is simply the marketplace reality that we are looking at.

 

[Sis]

Scales of economy come in to play with drive costs.

I'm not going to address the rest of the post, but this one comes up all the time and in my uneducated mind it appears to be used as a red herring.

Question with regards to economy of scale: let's say Sony wanted to make all PS3 cases gold plated. Would "economy of scale" fix the scarcity of resource issue?

 

[BenSkywalker]

I'm not going to address the rest of the post, but this one comes up all the time and in my uneducated mind it appears to be used as a red herring.

Question with regards to economy of scale: let's say Sony wanted to make all PS3 cases gold plated. Would "economy of scale" fix the scarcity of resource issue?

A better analogy would be if they were working with a hypothetical au insulated silicon chip. Something that utilizes something valueable in raw material form, but not in the quantity close to large enough to have an impact on the raw materials global price point. The larger factor would be the manufacturing capabilities and resources allocated to it. At first the cost would be enormous due to creating the capability to produce it at all, working out production issues and then ramping production. Eventually the manufactured cost would be marginal over the raw materials. What we are seeing now in terms of drive costs are issues based on the ability to manufacture the components needed to assemble the drives, not raw material cost issues. The former is easily addressed by scales of economy, the later is impacted in the exact opposite manner.

 

[Sis]

A better analogy would be if they were working with a hypothetical au insulated silicon chip. Something that utilizes something valueable in raw material form, but not in the quantity close to large enough to have an impact on the raw materials global price point. The larger factor would be the manufacturing capabilities and resources allocated to it. At first the cost would be enormous due to creating the capability to produce it at all, working out production issues and then ramping production. Eventually the manufactured cost would be marginal over the raw materials. What we are seeing now in terms of drive costs are issues based on the ability to manufacture the components needed to assemble the drives, not raw material cost issues. The former is easily addressed by scales of economy, the later is impacted in the exact opposite manner.

So am I to believe that raw materials, in the end, is the only fixed cost in manufacturing? That everything else will eventually have a production refinement that will achieve a constantly diminishing cost of production? A constantly increasing yield?

 

[RobertR1]

Wow Ben. Glad you got it all figured out.

Personally, I'm going to wait till Q1 2007 to see how it all unfolds.

 

[BenSkywalker]

So am I to believe that raw materials, in the end, is the only fixed cost in manufacturing? That everything else will eventually have a production refinement that will achieve a constantly diminishing cost of production? A constantly increasing yield?

Raw material costs aren't fixed either. Nothing is fixed in manufacturing- raw material costs tend to go up over time fairly constantly actually, just the reduction in costs of everything else involved in the production tends to significantly more then offset that.

As far as constantly increasing yields, it isn't exactly linear, but three hundred years into the industrial revolution tends to indicate that that does tend to be the case.

Robert- Q1 '07? What on Earth do you think will be proven to you by then? In realistic terms the next gen optical format should be pushing the billion unit mark when all is said and done, at least actually. Given that, what do you hope to gain in terms of marketplace understanding by the first half a million units sold? that 0.05% of the market is going to decide everything? If you honestly think there is a genuine format war, check in again around '11 to see how everything is turning out. At that point we will be in to the mass market phase and BR should be closing in on 100Million units sold even if HD won the war.

 

[Geo]

I'm coming in late, and didn't read it all, so my bad if I missed something relevant.

But looking at the poll results, I'd say those numbers would look encouraging to Sony re BRD. If as much as 26% of PS3 owners have HDTV and are interested in having the drives (rather than 'dude, it came with --you say it does what else?'), then I don't see any way that BRD HD movies don't get a solid squirt into the lead come December. Of course, these are XB owners being polled, and self-selected rather than scientific, but I dunno I've really seen something similiar anywhere else to try to project with.

Not conclusive in the overall HD movie battle, but an interesting number to see.

 

[inefficient]

I'm coming in late, and didn't read it all, so my bad if I missed something relevant.

But looking at the poll results, I'd say those numbers would look encouraging to Sony re BRD. If as much as 28% of PS3 owners have HDTV and are interested in having the drives (rather than 'dude, it came with --you say it does what else?'), then I don't see any way that BRD HD movies don't get a solid squirt into the lead come December. Of course, these are XB owners being polled, and self-selected rather than scientific, but I dunno I've really seen something similiar anywhere else to try to project with.

Not conclusive in the overall HD movie battle, but an interesting number to see.

I think you missed this thread.
http://www.beyond3d.com/forum/showthread.php?t=32531

This one projects 47% of PS3 buyers have a HDTV and will buy BR movies.

 

[expletive]

Just remeber the only reason why Toshiba's HD-DVD player is $500 is because they are selling it at a loss. It not $500 because it cost half as much to manufacture as Samsung's. Some have estimated as much as a 30% discount compared to the component costs for their HD-A1 player. (link)

While Samsung is probably making as much 30% profit margin on each player. Samsung is in it for the profits, they could care less about the formats adoption rate. They are cashing in on the fact at they are the only option on the market right now. Once PS3 and other low cost options emerge this will change.

Unless Toshiba finds a major way to cut costs, and unless they want to keep losing money, I don't think you will see a $400 player anytime soon.

Because of this I'm going to assume that the actual BOM and manufacturing cost difference is most likely quite negligible. Certainly not the huge $500 difference like it would appear currently.

So the cost advantage of HD-DVD is certainly overstated. And possibly even a myth.

And don't forget economy's of scale. With Sony pumping out essentially millions of BR players every year, component costs will no doubt go down.

I dont believe Toshiba has ever claimed theyre selling the player at a loss and if you search the net i think youll find that these stories all go back to the same market research analysis where MSRP could have been used to derive a BOM.

The cost advantage was always more in the media anyway. One would hope that at some point the BR camp could figure out how to cost-reduce their hardware to a mainstream price but the media is where HD-DVD holds the real cost advantage. When you multiply this advantage out over millions upon millions of discs it adds up.

 

[inefficient]

The cost advantage was always more in the media anyway. One would hope that at some point the BR camp could figure out how to cost-reduce their hardware to a mainstream price but the media is where HD-DVD holds the real cost advantage. When you multiply this advantage out over millions upon millions of discs it adds up.

The media cost advantage for HD-DVD is not translating to consumers as a better sticker price. The current average BR movie price is lower than the average HD-DVD price. BR $17.20, HDDVD $20.05 (link)

Worst case the cost to the consumers is identical. And the only party taking a hit on a media cost is the studios.

So I don't think media cost is a factor consumers need to think about at all. And as it stands now, the studios don't seem to care much about this detail either, as they nearly all side with the BR camp.

 

[Shifty Geezer]

You are assuming the stand alone player are limited to 2 million shipped units due to price.

I'm taking the available figures.

You are also overlooking the fact that every single one of those 2 million players will be used to play movies. You can't say the same about the consoles.

No I can't. What I can do is take a quick poll for a general idea, and the results we get, if the figures here are anything to go by, are 47% of PS3 owners will have HDTVs and buy BRDs, and 21 % have SDTVs but will also buy BRDs. Work out possible sales by the end of 2007, and you're looking at multiple millions of PS3s used as BRD players.

And finally that 2 million figure is an estimate by an analyst, which normally you don't seem to trust. At least you don't when they are talking about the high price of PS3 production or potentially low PS3 sales. Why do you suddenly find them extremely reliable now? It wouldn't be just because what they say seems to support your assumptions, would it?

You still don't get it, do you. This is an exercise in statistical analysis. If you want to start another thread 'how accurate is this analysts prediction' go ahead. This whole thread has little to do with accuracy. It's a little poll of tech-heads, and some discussion on results. It's not trying to prove any point or other, but see what reason there is to think one way or another. I take these figures as the only figures we have, and have to trust the analyst knows something about what they were doing (although they could be very wrong, just as these poll results could be) better than me or you just randomly guessing 'there'll be 5 million players by the end of 07' or 'there'll be 200,00 players by the end of '07'. This is different to an analyst report on BOM because we have our own knowledge of components that we can make our own partially informed decisions on. If I had experience in the CE player market I'd be in a position to challenge the anaylst report, but I'm not, and as we can't discuss the market without these figures, we have to take what we're offered. With the given figures we have something to work with, but the moment someone presents alternatives we can then reconsider how the markets going to shape up.

 

[Shifty Geezer]

While I agree with the theory of your point, I think you are making an oversight. By the mid part next that stand alone HD-DVD players should have dropped "well" below the $400 price point. Given the fact that these standalone players should be able to come down on the cost curves much faster than the consoles can. And the cheaper they get the more they will sell...

That's very much an unknown, but at the moment the average price is in the $1000 mark, with only one player at the <$500. Is it possible that standalone players can drop form $1000 launch price to say $300 in a year? If not, and only Toshiba are managing the entry-level price, assuming a very large potential market the sales of HDDVD will be limited to their production capacity. Now we're looking at factors none of us have insight to. What's limiting the price of these machines, how fast can Toshiba drop that, and how fast can they make the things and are willing to make the machines? I don't know what considerations that analyst report made in this area.

Looking at DVD, launch prices seem to have been around the $1000 mark (not easy info to find) at launch in Nov '96. By Spring '99 they were under $300. That's a couple of years to drop in price to mainstream. Can HD and BRD standalone prices drop faster? I'd have thought they'd take longer to drop as DVD used established red-laser tech where HD uses new and not yet as efficient blue laser tech. CD player price drops are something to look at too, but they're even harder to come by.