The console losses discussion thread (or 'how companies blow billions on products')*

[AlphaWolf]

Maybe its a question of thinking rationally..?
Will HD keep on growing and at some point in time completely take over SD televisions?

Probably, its already nearly impossible to buy anything over 20" that isn't HD.

Will there be an ever growing demand for HD material for these HD tv sets?

Maybe, but the price point has to be right. How much will people pay for HD content over SD content.

What is the only unified and broadly supported format that can do this?

Digital downloads?

For a flash based media to compete it would have to be as cheap as stamping Holes in plastic, it would have to be as unified as Blu-Ray is now (every movie studio and CE manufactor). Very unlikely in the near future.
Not to mention that if such a format saw the light in the next five years, it would have to compete with... Blu-Ray

Flash media isn't a whole lot more expensive than that right now, and the price keeps coming down.

I would prefer a flash based media, it´s just not around the corner....

Flash media is already everywhere, they have 2GB SD cards in the checkout lanes of my local supermarket for $10. The spot prices for NAND just keeps dropping. I'm not saying its ready to take movies tomorrow, but in 5 years? It wouldn't shock me at all.

 

[-tkf-]

Digital downloads?

Flash media is already everywhere, they have 2GB SD cards in the checkout lanes of my local supermarket for $10. The spot prices for NAND just keeps dropping. I'm not saying its ready to take movies tomorrow, but in 5 years? It wouldn't shock me at all.

Digital Downloads are not Unified and supported across the formats by all manufactors, it´s as bad as it can get.

When i can buy a movie from iTunes and watch it on my AppleTV/PS3/360 or whatever Digital i chose, then it will have a future. Movies tied to one hardware platform is just bad.

Since i started collecting my dvd´s i have had mayby 5 different players, my 100´s of dvd´s didn´t care about the brands the format was the key.

I found this (1 year old) on the BR Disc prices:
http://wesleytech.com/blu-ray-vs-hd-dvd-replication-costs-revealed/111/

$2.25 for a 50GB disc one year ago in 25k batches.
Maybe in 8 years NAND will be there but Blu-Ray will have moved on as well.
And how fast can you copy a 50GB movie to a NAND device?, that will add to the manufactoring cost as well.

 

[Mintmaster]

I think laptops and smartphones/iPods make flash a real possibility, and even TVs are getting AVCHD movie playback ability from flash. Maybe it's only SD in a couple years, but we could see HD/sub-SD combos soon after when the flash price is low enough.

BluRay's problem is that a BRD won't play in nearly as many devices as a DVD will. Flash movies could actually wind up being playable in more devices than DVD in 5-10 years without any marketing or standalone adoption at all.

 

[Cheezdoodles]

And how fast can you copy a 50GB movie to a NAND device?, that will add to the manufactoring cost as well.

Write\read speed to flash memory is much much much faster than what you can achieve on optical discs....

 

[patsu]

We seldom see overseas Blu-ray numbers. So here it is:
http://www.stor-age.com/stor-age/2008/0709/972004.shtml
(My chinese is passable but not great)

Essentially, BDA held a high profile presentation to detail its China expansion plan on 8th July. Based on the organization and the caliber of the attendees, it seems that BDA's China venture is sincere. I'll go through the slides and only translate those that include data points.

Depending on the title, individual top Blu-ray movie sales has reached as high as upper 20% of DVD sale for the same title in 2008. In 2007, it was negligible.

In Japan, Blu-ray recorders/players has now achieved 32% market share (up from 20.7% when Toshiba exited HD DVD business).

Europe lags behind Japan and US by about one year, but will enter growth phase in late 2009.

Blu-ray PCs and drives are projected to sell about 7.8 million units this year, compared to 2.4 million Blu-ray/HD DVD equipped PCs last year. (The slide shows 240 and 780, but the unit is 10,000). These are probably sell-in numbers, I think. Matsushita estimated that Blu-ray PCs/laptops will have higher growth than Blu-ray CE devices in 2008.

There are currently 14 Chinese manufacturers who are licensed to produce Blu-ray devices. 2 more heavy-weight companies remain under wrapped (To be announced).

A new Blu-ray testing center has been established in China itself. BDA has also validated the indigenous DRA audio codec. It may become an optional Blu-ray codec later.

Sony DADC will also open new production lines in Shang Hai, China (Estimated 500K discs/month). They already have an outfit in Hong Kong. The Australian line will also be expanded to 1 million discs/month by Feb 2009. If more discs are needed, they have the capacity to expand.

Movie sales speaking, first six months of Blu-ray movie sales is 4-6 times of the same period in 2007. Currently, Blu-ray sales hovers around 7% of total DVD + Blu-ray volume. It is projected to hit 15% by end of 2008.

Growth of Blu-ray is comparable to DVD during inception (first 4 years). In US, it slightly lags behind DVD. In Europe, it slightly tread above DVD's.

Sony Pictures will be the first studio to release Blu-ray movies in China.

Blu-ray player's growth rate (consumer sales) is 6 times higher than DVD player growth in Europe, 3 times higher in US. This is more because DVD player sales has dwindled compared to its hey days.

In Asia, Sony's Blu-ray movie sale is already 20% of their DVD sale. The effectiveness is credited to the combined arms of Sony Pictures, Sony Electronics and Sony sales and marketing folks on the ground.

The key Blu-ray patent holders are encouraging every patent holders to join the unified patent pool (to provide one stop "shopping" for manufacturers).

Finally, they conclude the event by bringing out an environment-friendly message: Each packaged Blu-ray disc only takes 800g of CO2 to produce. They believe this is considerably lower than even a video stream (due to server needs).

 

[Carl B]

Digital Downloads are not Unified and supported across the formats by all manufactors, it´s as bad as it can get.

This is a point I was going to make; it doesn't matter that digital downloads might be a bigger market unto themselves than Blu-ray, what's important is understanding that that market is not monolithic - it is seriously fragmented.

Now if we were talking about iTunes here, then sure, iTunes is a beast that we can discuss on its own terms. But Blu-ray as the 'singular' optical successor is a format around which a commonality of platforms is built... different companies offer Blu-ray players, and the ecosystem is broader than any one company. With digital downloads what you have is an environment in which certain distribution systems support certain devices, and the resultant downloads are not easily accessed across disparate platforms.

This is also why I think it's absolutely imperative that Sony go full steam with the digital download initiative. In my mind, it was always the case that after the format war was wrapped up, effort would shift to digital. To do otherwise is to let platforms other than the PS3/PSP become the avenues via which PS3 owners will purchase such content. And if Sony wants to become a serious player in that space, it has to begin sooner rather than later.

If and how media digital distribution will ever standardize is beyond me, but regardless even in its present fractured state to forgo being a player with a device seemingly built with such in mind would seem reckless at the minimum.

I'm all about digital copies of content being included on BD discs as well, but the effort has to go beyond just Blu-ray in terms of a corporate strategy.

...As to flash media distribution, I think the costs are still prohibitive on the true 'media' front; video/music. The 32GB cards one buys at retail have little in the way of margins for the manufacturer, and essentially the channel isn't too deep. BD's don't cost anywhere near their retail price to replicate, and you can be sure that the costs that get added on throughout the chain will get lumped onto flash media as well. So comparing the cost of a retail BD movie isn't apples:apples when comparing to that blank OEM SD card you may have seen at the local computer store. The same SD card with the Disney logo slapped on and carrying a DRM'd HD movie would have its price jacked way way up. If a BD50 costs ~$1 and a couple of seconds/disc mass replicated in the year 2010, I don't see where a ~32GB flash card will be competitive on either a cost per unit or scope/speed of distribution basis.

In the future, I'd be willing to believe anything though. Whatever the standard that emerges, it's really just more a matter of coalescing the CE industry around a certain format and method, and the rest can sort itself out as interoperability takes hold.

 

[obonicus]

I think laptops and smartphones/iPods make flash a real possibility, and even TVs are getting AVCHD movie playback ability from flash. Maybe it's only SD in a couple years, but we could see HD/sub-SD combos soon after when the flash price is low enough.

BluRay's problem is that a BRD won't play in nearly as many devices as a DVD will. Flash movies could actually wind up being playable in more devices than DVD in 5-10 years without any marketing or standalone adoption at all.

As a delivery mechanism, though?

I can certainly see large-capacity flash used for the purpose of say, storing legally downloaded movies, or as storage for portable devices, but would the studios be putting out, say, (read-only?) SD cards with movies on them? That's mostly what I'm objecting to.

 

[obonicus]

Write\read speed to flash memory is much much much faster than what you can achieve on optical discs....

I'll give you read speeds, but for manufacturing, aren't optical discs pressed? Isn't that a fast, cheap process? I'll be honest that I'm not sure what's involved in manufacturing flash with content pre-recorded on it so I easily might be wrong.

 

[Shifty Geezer]

Flash media is already everywhere, they have 2GB SD cards in the checkout lanes of my local supermarket for $10. The spot prices for NAND just keeps dropping. I'm not saying its ready to take movies tomorrow, but in 5 years? It wouldn't shock me at all.

Right. Only PS3 isn't launching in five years . BRD was the only option for launch (other than HD DVD!) and the only viable option for high-quality HD content with global distribution at the moment. Downloads are limited by services and broadband availibility, not to mention the whole issue of ownership and media portability. It's quite likely that one day we'll have a good download service. It's also highly likely that we'll be able to put HD movies onto flash storage. We may even have the industry decide on standards within five years (ha ha ha ha ha! ) that solve all the media transportability, cross-service content issues. Between now and then Sony have 5+ years to establish BRD and make loads of money from it. Furthermore it could well lead into technology control over production systems and DRM systems used in future technologies, such as Sony gaining royalties on whatever Managed Copy system ends up getting used, established from BRD.

Is the age of optical disks coming to an end? Yes. Is it too late for BRD to be a successful venture for Sony. No.

 

[-tkf-]

Write\read speed to flash memory is much much much faster than what you can achieve on optical discs....

With a glas master you essentially press 25GB discs in seconds on a BluRay production line.

Lets say you can write to nand with 100 mb pr second. 1 GB in 10 seconds, that is still 4ish minutes for 25 GB.

 

[dobwal]

Flash based media doesn't have to be as cheap as optical media as there inherent advantages to Flash based media.

You don't need an optical drive nor an HDD for a console that used flash based media, which drops the cost of the BOM of a console. How much would have been saved in manufacturing costs if the 360 or PS3 came with neither a HDD nor a optical disk drive. The advantage here is that consoles could be more of a profit driver and remove the risk associated with depending on software sales to subsidize hardware costs.

A flash based model would be the spiritual successor of the cartridges model with some of the serious disadvantages removed (but some still being present like longer lead times on resupplies).

ROM was fairly expensive but the economies of scales are different from flash now allowing for cheaper costs. Before RAM/HDD displaced ROM/RAM, computers were a much smaller market and ROMs had no standard form factor. Plus, any console manufacturer going to flash based media would probably become the largest consumer of flash based memory (I think Apple is currently now). A hypothetical flash game based 360 would have put 150-160 million flash drive games as of now further driving down costs. Plus with SSDs just now gaining a foothold in trying to replace HDDs, flash cost will have an extra push downward.

Pubs would be reintroduced to higher manufacturing cost and longer lead times on resuppyling the market. However the manufacturer could offset this with lower licensing fees as lower cost hardware would not need the level of subsidizing faced by Sony and MS. There were reasons why Nintendo didn't want to move away from cartridges but the cost differences were too great. A few pennies per 650 MB CD versus ~$25.00 per 64 MB cartridges provided a great motivator for pubs to move to the PS1 once it gained success. But the gap between BluRay and flash based media shouldn't be that big in terms of cost nor size difference.

Another advantage is flash based media allows for software and hardware anti circumvention of the media itself, which means the level of piracy could be dramatically reduced. A plus for any manfacturer especially for Nintendo who tried everything to stay away from a standard format.

I think if flash was fairly cheap today, I would see no reasons for any console manufacturer to maintain an optical drive nor an HDD. I think for every sense other than economically, flash has too many advantage to warrant the current config of a PS3 or 360. The economics of today will be different tomorrow so if manufacturer price hit the 5-7 dollar range per drive, I see one of either Nintendo, MS or Sony adopting the media.

 

[Karoshi]

With a glas master you essentially press 25GB discs in seconds on a BluRay production line.

Lets say you can write to nand with 100 mb pr second. 1 GB in 10 seconds, that is still 4ish minutes for 25 GB.

How many SD can you put in the space of a BRD? Pack the SDs on a tray, multiply that by the write speed. Using a 10x10 thightly packed tray you arrive at 4/100 minutes/SD on average. Being digital, each one of those SD could carry different content. Retooling time is around 0 seconds vs. moving glass masters around, assuming you have big ass HD array streaming to the write heads.

-> Moot point, IMHO.

 

[-tkf-]

How many SD can you put in the space of a BRD? Pack the SDs on a tray, multiply that by the write speed. Using a 10x10 thightly packed tray you arrive at 4/100 minutes/SD on average. Being digital, each one of those SD could carry different content. Retooling time is around 0 seconds vs. moving glass masters around, assuming you have big ass HD array streaming to the write heads.

-> Moot point, IMHO.

Not a moot point, but a point worth discussing since that is one of the things that would be an issue. Instead of writing one Nand at a time you could of course write 100´s each time. It would reduce that issue and of course make the line more expensive. Would it be more expensive than Blu-Ray. Thats to be seen, if we could get the prices on the fabrication of DS carts, maybe even some picture from the lines we would learn some more.

Moving Glas masters "around" is something that has been done since the CD was introduced, and it´s something that has 20+ years worth of experience put to use in the production lines.

 

[dobwal]

With a glas master you essentially press 25GB discs in seconds on a BluRay production line.

Lets say you can write to nand with 100 mb pr second. 1 GB in 10 seconds, that is still 4ish minutes for 25 GB.

I don't think you have to program a NAND chip with game code the same way you transfer a file over a USB port on to a flash drive.

 

[patsu]

Warner launching aggressive Blu-ray pricing in 4Q: http://www.videobusiness.com/index.asp?layout=article&articleid=CA6577564

In this program, retailers will buy the titles at their present pricing but obtain rebate money back upon the sale of each unit. That should ultimately amount to a relatively inexpensive $11 cost for retailers.

...

The consumer price for these titles is likely to fall somewhere between $17 and $20. That would still represent a deal for shoppers, as titles such as 300 are now falling between $24 and $30 at outlets such as Amazon and Best Buy.

I almost bought "The Other Boleyn Girl" this morning, but put the movie back on the shelf after considering the $29.99 price tag. If it's $20, I will certainly buy more Blu-ray movies.

The retailers have a point, but hey I want my Hidef movies.

 

[AlphaWolf]

The Fugitive, Enter the Dragon, Clockwork Orange, The Shining, The Aviator, Road Warrior and Swordfish

Not exactly new releases.

 

[eastmen]

it be interesting to see how flash drives have info put on them. I know that some flash drives have software on them .

however how are ds carts made ? They don't seem to have to much problem setting that up. Perhaps a terminal that you can house hundreds of sd cards in and transfer the data over to them ? I dunno thats interesting to me.

however how about this (as i posted in another thread ) Why just have one flash drive or sd card ? You an have 2 sd slots or even 4 sd slots and it will take up much less room thana bluray drive.

Simply spread the data across 2 sd cards and get 44MB/s transfer rate (between 6and 12x bluray speeds ) Or you can get 4 sd cards and get 88MB/s which is over the 54MB/s of 12 x bluray drives . you also wont get any of the noise problems . You'd save space over a 5 1/2 disc drive so you can increase the cooling capacity or decrease the size of the console.

its also scalable so you save money . Got a 4 gig game ? use a 4 gig sd . Need 32 ? Use a 32 gig or if u need 4 8 gig cards for maximum transfer rates. Bluray your limited to 25 or 50 gigs . But flash if you need too with 4 sd slots you can actually have a 128 gigs of space. When 64 gig cards come out you have have up to 256 gigs .

Now I doubt flash will ever go down to under 25 cents like bluray. however flash allways gets cheaper and gets replaced with larger capaictys and faster speeds . When the xbox 3 launches in 2010/2011 32 gigs may cost $1 or $2 but by 2015 128 gig sd card will cost $1-2 . mean while bluray will still be limited to 50 gigs ( or perhaps ps4 will launch with 3x or 4 layer support. but still only a 100 gigs there and the discs will cost more when they first come out)

So sd cards could be the way to go .

 

[patsu]

Not exactly new releases.

Those are just older catalog examples you cited from the article. The article include newer ones like "I am Legend". If the retailers consider it as a repricing, then the impact would be across the board.... though newer ones would be discounted less (Still... Yay !).

 

[eastmen]

Those are just older catalog examples you cited from the article. The article include newer ones like "I am Legend". If the retailers consider it as a repricing, then the impact would be across the board.... though newer ones would be discounted less (Still... Yay !).

by then I am Legend will have been avalible on bluray for almost a year .


Mean while Batman the movie is $40 bucks at walmart and circut city. Batman gotham nights is $30 at bestbuy and $40 at walmart and circut city

I'm not exactly running out to buy these although i would if they were closer to $20 bucks

 

[patsu]

by then I am Legend will have been avalible on bluray for almost a year .

But of course... they can't exactly use a future title as an example right ?
Like I said, if the retailers label it as a repricing, it will impact all the Warner titles to various degree.

Mean while Batman the movie is $40 bucks at walmart and circut city. Batman gotham nights is $30 at bestbuy and $40 at walmart and circut city

I'm not exactly running out to buy these although i would if they were closer to $20 bucks

Sure... the program hasn't started yet right ? For now, you can buy cheap ones from Amazon deals, or get catalog titles. We already know the relatively high movie price has dampened the momentum somewhat. Things will keep improving as long as the BDA members listen diligently to the market.

My ex-boss used to tell me: Don't underestimate the beauty/advantages of "Being out on the market already". Things often take a life and momentum of its own. Everyone wants to succeed.