+Audioboxer Subscriber² Posted January 10, 2008 Subscriber² Share Posted January 10, 2008 Blu-ray to 'Unlock True Value' of PS3, Accelerate Sales; Price Cut by Year-End?We spoke to four leading analysts to find out what impact the Warner Bros. Blu-ray deal will really have on PS3. Also, Michael Pachter believes another PS3 price cut will be in place by the end of '08. With Warner Bros. (and associated companies like New Line and HBO) committing exclusively to Blu-ray the format war seems to be nearing the end with a likely victory for Blu-ray. Assuming that's the case, we were wondering how much this would boost PS3 sales (if at all). Did Sony's gamble on a proprietary format finally pay off? GameDaily BIZ got in touch with several leading game industry analysts to get their two cents on the potential fallout of the Warner deal, as it concerns the console war. Mike Hickey of Janco Partners seems to believe the impact of a Blu-ray victory could be quite substantial. "We believe Warner's exclusive support for Blu-ray will eventually prove to be the determining 'win' in the current high definition DVD format war. We expect Sony's PS3 product will benefit from an eventual consumer and retail awakening of Blu-ray as the winning high definition format. If Blu-ray can win the current format war, the true value of the PS3 can be unlocked, and will likely lead to an acceleration of PS3 sales," he said. Hickey continued, "Increased PS3 sales and subsequent installed base growth will motivate 3rd party game developers as the market opportunity for them increases, which should lead to better relative software offerings. We believe the Warner exclusive Blu-ray news is good for the PS3, 3rd party game developers/publishers, and the video game industry as a whole." Michael Pachter of Wedbush Morgan Securities thinks it's an important win, but the real impact won't be felt for some time since 1080p HDTV penetration is still fairly low. He does believe, however, that by the end of this year we'll start seeing a spike and that Sony will likely cut the price on PS3 by then as well. "Phil Rosenberg [senior Vice President, Sales and Business Development, SCEA] said at a conference that something around 70 – 80 percent of PS2 owners used the console as their first DVD player. The same will likely be true of PS3/Blu-ray," Pachter said. "The difference this time is that you can't enjoy the full experience unless you have a 1080p TV, and we are still below 10 percent penetration. I think as overall HDTV penetration crosses 50 percent of households (probably late this year), Blu-ray will become more relevant, and PS3 will have an advantage." He added, "So look for a spike late this year, likely coinciding with another price cut." Colin Sebastian of Lazard Capital Markets is encouraged by the Warner deal as well and believes it will eventually help PS3 push more hardware. "Blu-ray has clearly gained momentum, and the upper hand, and the Warner announcement also provides a boost to the format, as well as for the advocates of Blu-ray as a standard. That said, locking up the suppliers of content and hardware manufacturers is only part of the equation. Consumers also must decide that they need a Blu-ray player, which seems more and more likely as prices decline," he said. "As for the PS3, it definitely can't hurt, despite the fact that gamers early in this console cycle have shown a preference for simple and more intuitive experiences (Wii and DS) over the traditional video games. But as the next-gen games continue to improve, and hardware prices reach more reasonable levels, I think we will see a better uptake of the PS3." Finally, DFC Intelligence's David Cole noted that it's games, of course, that will be the ultimate determinant in the console wars. Blu-ray just happens to be a bonus for PS3 owners. "I don't think Blu-ray alone is enough to get people to commit to a game platform," cautioned Cole. "However, if consumers are trying to decide between a game platform and they feel both are fairly equal in terms of games, then I think Blu-ray could be the swinging factor for the PS3. Nevertheless, the key factor is games. I don't think Blu-ray would ever be a swinging factor as big as say a game like Halo 3. The biggest boost for PS3 sales will most likely be 1) lower price; 2) more exclusive game software and only after that Blu-ray." Source: http://www.gamedaily.com/articles/news/blu...end/19030/?biz= They make a very fair point about a boom in sales for the PS2 as it was the "first" most accessible/well priced DVD player. Could history repeat itself with Blu Ray having the advantage just now: People buying PS3s to get into hi-def content when buying their HDTVs. Lets face it 2008/2009 and 2010 will be the years that the HDTV market will be saturated. By 2010, I think its safe to say HDTV > SDTV in terms of population. I think so, over in the UK the PS3 already gets its fair share of marketing in elecritcal outlets as the Blu Ray player to accompany your TV! And with standalone prices as high as they are, and the PS3 as Blu Ray player being fully specced/kitted out, it's a bit of a no brainer. Plus for the techies you get a top class media hub for your house. As for a PS3 price cut, I wouldn't expect a UK cut till Q3 earliest/Q4 most likely. Especially with the 40GB being picked up from anywhere between ?260-280 if you shop around. Link to comment Share on other sites More sharing options...
ctebah Posted January 10, 2008 Share Posted January 10, 2008 if a cut is in store, lets hope it comes sooner than later.....and if it happens it will be good news both for the ps3 as well as blu-ray. Link to comment Share on other sites More sharing options...
Coldgunner Posted January 10, 2008 Share Posted January 10, 2008 PS3 has pretty much carried the format IMO, not a bad thing, I can see more systems being sold as HD catches on. Link to comment Share on other sites More sharing options...
Slimy Posted January 10, 2008 Share Posted January 10, 2008 Yes. (second last paragraph) Link to comment Share on other sites More sharing options...
FreqFace Posted January 10, 2008 Share Posted January 10, 2008 Well, when Blu-ray 'takes over', it will certainly boost PS3 sales, if only a little. If you were comtemplating getting a PS3, this would tip you over the edge to get one. I can envision MS releasing a Blu-ray drive for 360 in the near future, which would be nice! Link to comment Share on other sites More sharing options...
Green_Eye Posted January 10, 2008 Share Posted January 10, 2008 If there is a reasonable price cut and I get round to buying a HDTV then I will purchase a PS3 by years end if only to have all three consoles and have future gaming all nice and locked down so I wont miss no good games. But please make price cut reasonable :cry: Link to comment Share on other sites More sharing options...
daveoc64 Posted January 10, 2008 Share Posted January 10, 2008 No. I think that the PS2 DVD player thing was totally blown out of proportion. I used it to justify buying mine - in reality I never used it to play DVDs. Link to comment Share on other sites More sharing options...
Slimy Posted January 10, 2008 Share Posted January 10, 2008 I used it to justify buying mine - in reality I never used it to play DVDs. It doesn't matter whether you did or not. The fact that you justified your PS2 purchase for the built-in DVD player is what matters. As far as the company is concerned, the marketing worked on you. Link to comment Share on other sites More sharing options...
Tech Star Posted January 10, 2008 Share Posted January 10, 2008 Yes, it helped DVD become mainstream, then it can help Blu-Ray (in which it almost has!). Link to comment Share on other sites More sharing options...
+Audioboxer Subscriber² Posted January 10, 2008 Author Subscriber² Share Posted January 10, 2008 Yes. (second last paragraph) Thanks for posting that, im going to read through it (Y) Should be interesting as it was posted before studio annoucements. Link to comment Share on other sites More sharing options...
sn00pie Posted January 10, 2008 Share Posted January 10, 2008 People originally blasted Sony for including the BD drive with the PS3, but clearly that risk paid off for now atleast. 2008 BD sales are gonna sell like hotcakes compared to how it sold in 07', and it sold pretty good in 07'. If we see $99 BD players in the future, thats what the average consumer looking to go HD will opt for, not a PS3. Until then it should help PS3 sales slightly at the most, it should help sales significantly, but not amazing figures... :D I doubt Sony will have a price drop, the way things have been going its more likely that they will release new models then drop the price on current models. Link to comment Share on other sites More sharing options...
Slimy Posted January 10, 2008 Share Posted January 10, 2008 Thanks for posting that, im going to read through it (Y)Should be interesting as it was posted before studio annoucements. It's very good. I know because I wrote it :rofl: Link to comment Share on other sites More sharing options...
+Audioboxer Subscriber² Posted January 10, 2008 Author Subscriber² Share Posted January 10, 2008 It doesn't matter whether you did or not. The fact that you justified your PS2 purchase for the built-in DVD player is what matters. As far as the company is concerned, the marketing worked on you. True, whether you like it or not :/ "Phil Rosenberg [senior Vice President, Sales and Business Development, SCEA] said at a conference that something around 70 – 80 percent of PS2 owners used the console as their first DVD player. Maybe take the figures with a grain of salt, but it will still be a high %. You have to remember the DVD player in the PS2 was pretty rough by any standards. It was quickly replaced by decent standalone players at a similar cost/less. The Blu Ray components in the PS3 fair better than the DVD player in the PS2 if you ask me (Y) I think people have to take that into consideration :yes: - As it will "increase" the life span of the PS3 as the best/a good Blu Ray option. If it can be updated to profile 2.0 as well, theres another plus - Updated to 1.1 fine, but I don't know what is needed to hit 2.0 Link to comment Share on other sites More sharing options...
Slimy Posted January 10, 2008 Share Posted January 10, 2008 The Blu Ray components in the PS3 fair better than the DVD player in the PS2 if you ask me (Y) You can't say that :laugh: We don't know how new Blu-ray players will be like! Chances are, just like DVD players released after the PS2, they will be much better than the Blu-ray components in the PS3. Link to comment Share on other sites More sharing options...
Cormier6083 Posted January 10, 2008 Share Posted January 10, 2008 (edited) Sorry, I had to vote for HD-DVD. :D I honestly have no idea. Maybe so. I mean, look how many more PS3's used for Blu-Ray there are than dedicated players. Oh, and my PS2 was my first DVD player. I like pizza pie, I like macaroni, but what I love is My First Sony! Edited January 10, 2008 by Cormier6083 Link to comment Share on other sites More sharing options...
+Audioboxer Subscriber² Posted January 10, 2008 Author Subscriber² Share Posted January 10, 2008 You can't say that :laugh: We don't know how new Blu-ray players will be like! Chances are, just like DVD players released after the PS2, they will be much better than the Blu-ray components in the PS3. I dunno though... The PS3 rates as one the best Blu Ray players currently, even compared to $300/400 players. I guess what im getting at, is, I believe DVD playback in the PS2 was more "tacked on" fast and dirty - It wasn't meant to be "quality", but meant to cash in quick in the DVD market. It's like grabbing one of your cheap supermarket DVD players and putting it in a console. I don't think the PS2 DVD player was rated all that highly in the tech world either - Yes it worked fine, im not debating that - More so it burnt out really quickly, and was replaced by better options shortly into its lifespan. The PS3 has been given more love in it being more future proof, offering all you need right now in a player (720p/1080p/1.1/5.1 DTS). And a hard drive as well. Not to mention, the recent PS3-PSP Blu Ray movie copying - While that may not have a huge impact, it will still be the only way to legally get your Blu Ray movies on your PSP (in other words, I doubt standalone players will be able to do this) Link to comment Share on other sites More sharing options...
DPyro Posted January 10, 2008 Share Posted January 10, 2008 I highly doubt their going to have another price drop. One would think they'd break even on the console first, or even start making a profit on it before they even consider dropping the price. Link to comment Share on other sites More sharing options...
+Audioboxer Subscriber² Posted January 10, 2008 Author Subscriber² Share Posted January 10, 2008 I highly doubt their going to have another price drop. One would think they'd break even on the console first, or even start making a profit on it before they even consider dropping the price. One can only hope they're willing to take a bigger risk as the PS2 is raking in pure profit still - Well not pure profit, but you know what I mean ;) (7-8 year old technology, selling in thousands still) I think Sony see a return on the PSP as well. If MS drop prices, Sony will no doubt follow reasonably soon after. Link to comment Share on other sites More sharing options...
Xero Posted January 10, 2008 Share Posted January 10, 2008 They will drop the price of the PS3 again, as a 299 starting price will attract a LOT of customers, as many still think the PS3 is overpriced. But I doubt anytime soon which is unfortunate as by the time they do drop the price it might be too late to regain any lost ground in the console war. As for the Blu Ray aspect, many people talk about how the PS3 lost the console war, which if it was all up to sales would be true. But gaming aside its the PS3 thats helped make Blu Ray as popular as it is. When it was first released you'd be dumb to buy another player over the PS3 as it was hell of a lot cheaper and it had the ability to play games too (I know, shocking) I know many people who bought one just for the Blu Ray movies, my Dad is one of them. They took one for the team and helped give Blu Ray the dominance it now has. However I can't help but wonder how long Blu Ray will even last, with Flash memory coming down in prices so rapidly and having so many benefits over a disc I can't see them lasting as long as DVD's have, which would make this whole format war a big waste of money. Link to comment Share on other sites More sharing options...
+virtorio MVC Posted January 10, 2008 MVC Share Posted January 10, 2008 I want to vote "HD-DVD will become dominant format" (as I have been a HD-DVD supporter and own about a dozen HD-DVDs) but will have to vote Yes. Link to comment Share on other sites More sharing options...
sanctified Veteran Posted January 10, 2008 Veteran Share Posted January 10, 2008 I am starting to understand Sony's PS3 strategy. They foretold (with a lot of risk) a BR victory. While XBOX360 game catalog its a lot better and richer and (it seems) its architecture its a bit better for gaming the PS3 appeals to a wider audience. Its a good gaming console (With a very, VERY, respectable upcoming 2008 catalog) a player for the (Now it seems) future movie mainstream format, the access machine for a 3D social Network with a lot of potential (I dont like it but lets get real, social networks are huge right now and has quite a future) with Home and its architecture its used in a very wide variety of task, even science and medicine (an immediate example: PS3s are now the main machines in the Folding@Home project). The Sony gaming strategy and techinical department are the company MVPs. Link to comment Share on other sites More sharing options...
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