HD-DVD and Xbox the early winners in next-gen format wars

Hmm, I don't know how much stock I put in his predictions, since he begins his column stating that earlier, he predicted Blu-Ray was the only one that could win.

Also, while it's true PS3 is not available anywhere, the 360's HD-DVD drive is pretty hard to find as well.  I have yet to see it on the shelf of any major retailer (nor do I see an empty space where it used to be).  And I think it's a flawed assumption that many 360 owners will invest in the HD-DVD player.  I think that by the end of 2007, more people will have PS3's (and thus Blu-Ray players) than 360 HD-DVD players.

I think at the end of the day, this format war is not going to be decided by the few technophiles who actually aren't satisfied with normal DVD's.  It took me a few years to even realize that normal DVD's weren't "high def".  When DVD's first came out, they were praised as having the best quality you could get.  I think most consumers still hold that to be true, and they don't feel the need to upgrade.  And even if they do become educated and start to feel a lust for 1080p movies, I think their decision about which player to buy will be based on which movies will be available on which format.  Or, they'll get a PS3 because they want to kill Japanese crabs, and in doing so they'll get a Blu-Ray player without realizing it.

I spent a good fifteen minutes staring at a 360 HD-DVD player the other day, trying to decide whether to buy it or not.  My friend asked me, "What would you be getting?" and I realized the answer was nothing--yet.

I love my 360.  I love to buy it things to make it happy.  But getting the HD-DVD player just wasn't worth it--not until it offers content that I really yearn for in HD.  Talk to me again when Lord of the Rings is available.  Oh yeah, and when I can use an HDMI cable to hook my 360 to my TV, so I can actually get 1080p.

Sony's made a lot of mistakes. People want a PS3 to, you know, play games, not watch movies. MS is giving you the option. They're not forcing you to buy their HD-DVD. Sony could've made Blu-Ray optional and slashed the price of the PS3 by $200 and everyone would've been singing their praises. But, I think Sony is more interested in their new DVD format than their new gaming format at this point. Even if I get a PS3 I probably won't watch a single film on it cause I want a Sony PLAYstation to, you know, play. I read an article the other day that stated that Sony's "jam our product down the consumer's throat and they will love us" method is backfiring and that the biggest threat to Blu-Ray has become Sony itself. Pity.

Your point about the use-case for these products is right on. Sony's wrapped the PS3 around their efforts to control the next (and probably last) optical format. This has driven the price and availability of the PS3 in the absolute wrong directions.

Meanwhile the Xbox team have focused on a more future-proof scenario (non-physical distribution of content) while making the barrier to entry into the high definition home video market much lower than Blu-Ray.

The year-end and holiday season numbers on PS3 vs. Xbox 360 HD-DVD deployment will certainly tell an interesting story, and with more concrete evidence. We'll be watching for those reports over the next couple months.

Your point about the user experience of these next-gen formats is exactly the point I made in a 10 video from May that hasn't seen the light of day. The evolution from VHS to DVD was made because there were a handful of concrete advances in the experience of watching home video. This time around though, there aren't a lot of differences in how we'll experience a copy of The Two Towers. This is exactly why it's a harder sell to the non-geek.

As for the hope/dream of an HDMI Xbox 360 interface, all I can say is that you aren't alone.

It's probably true that many people won't buy a PS3 because of the extra $200.  And it's definitely true that Blu-Ray complications handicapped the PS3's launch.  I think the decision to force integration of PS3 and Blu-Ray has, and will continue, to hurt the PS3's sales.  The decision definitely hurt them with regard to the video game console war.

However, with regard to the format war (which Sony may consider a higher priority than winning the video game war), the decision may have been the right one.  Even with the lower number of overall PS3 sales, I still firmly believe that many more people will own PS3's than HD-DVD players by the end of 2007 (but I also believe more people will own 360's than PS3's).

It was noble that Microsoft gave consumers the choice about HD-DVD, and I think it has, and will continue, to help 360 sales.  The problem is, there simply isn't (at this time) enough education or incentive for most consumers to make the investment in the HD-DVD player.  It's a great technophile device, but I doubt it's going to steer the format war, as Rob Enderle predicts.

That's not to say Microsoft made a mistake.  I think it's clear that Microsoft is trying to win the video game war above all else, and I think they will.  And I think they have a far lower stake in the format war than Sony does.

So, I think Microsoft made the right decision for Microsoft, and Sony, assuming they really want to win the format war, made the right decision for themselves.  But the PS3 is gonna have to take one for the team.

I just want to share a "why I switched to Zune video" I found on Youtube

http://www.youtube.com/watch?v=txPX6fsTp9Y

This does more to promote the Zune than any MSFT marketing I have seen so far. This could be the start of a grass-roots effort to promote the Zune...by real people