M$ put on Blast

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<H2>The Blu Corner

Rob Fahey 08:00 (BST) 29/06/2007
"To put it bluntly, Microsoft wants both Blu-ray and HD-DVD to fail..."
Predictions of the end of the face-off between Toshiba and Sony over next-gen DVD standards have been rife for the last few years. But while hopes that it would all be over by last Christmas were wildly optimistic, it seems certain that a dominant format will have emerged in plenty of time for this year's holiday season.
The reason is simple; Blu-ray, always the favourite to win but never seemingly having the momentum to fully outpace its rival, has finally started to pull ahead in a meaningful way. The finish line is in sight.
This won't come as a surprise to many people. Perhaps the biggest surprise is that the battle has stretched out for so long. HD-DVD has always been a peculiar beast - a technologically similar format to Blu-ray, but one whose curious alliance of business partners has raised eyebrows from the outset.
The most important backers that a movie disc format can have are, obviously enough, the movie studios. But thanks to stronger protection systems and, in no small part, to the fact that Sony owns many of Hollywood's biggest studios, Blu-ray has always been the preferred choice of those firms.
With only one studio (Universal) exclusively supporting the format, the most vocal supporter in Toshiba's corner has actually come in the slightly unlikely form.
Microsoft has been HD-DVD's champion; Microsoft, a company which doesn't own any movie content, which has repeatedly stated that it won't be releasing any game content on HD-DVD, which doesn't build any of the PCs that run its operating systems and therefore has very little say in which disc format becomes standard on desktop machines.
As such, for all its huffing and puffing, Microsoft's sole contribution to the HD-DVD ecosystem has been to launch an external drive for the Xbox 360 console. It's not a bad contribution, in some ways; it offers a very cheap entry point to HD-DVD for a fairly significant number of consumers, for a start.
However, Microsoft has been sending mixed messages even over this commitment to the standard; it has gone to great pains to point out that should Blu-ray win the standards war, Microsoft can always launch a Blu-ray external drive.
Even though such statements are usually followed up with a "clarification" stating that it doesn't plan to do any such thing right now, it's hardly the ringing endorsement Toshiba might have wanted from its best-known partner in this enterprise.
The fact is that Microsoft's involvement with HD-DVD has very little to do with any real interest in who wins the DVD standards war. If Microsoft actually cared about next-gen disc formats, they would have put a HD-DVD drive in the Xbox 360; but the firm's colours have been clearly pinned to the mast from day one, and it's now reached a point where even HD-DVD's most adamant supporters can no longer turn a blind eye to its true intentions.
Microsoft believes in digital distribution. It believes, fervently, that the hour has come for content to be transmitted to consumers over the network, rather than on a piece of physical media.
It's not the only company in the world that believes this, of course. But of the major players, perhaps only Apple is quite so confident that digital distribution's day is today, not tomorrow.
In Microsoft's worldview, there's no space for a next-gen DVD format. Instead, the firm wants the transition to high definition to occur alongside a transition to digital distribution - and even while making a HD-DVD drive available, the firm has been pushing Xbox 360 consumers towards a clearly preferred model where they pay to download video content to their console's hard drive.
To put it bluntly, Microsoft wants both Blu-ray and HD-DVD to fail. If either format becomes dominant and securely established, it will provide an attractive option to consumers still not quite ready to commit to a media future with no physical products.
However, a fragmented, uncertain market, where a hefty investment in the wrong technology could turn out to be money down the drain, drives consumers straight into the welcoming arms of digital distribution.
When Microsoft first started beating the war-drum on behalf of HD-DVD, it was starting to look like the battle would be over all too soon. The movie studios were lining up behind Blu-ray, the inclusion of a fully specced player in the PlayStation 3 was looking decisive, and it looked for all the world like HD-DVD would be a flash in the pan before being obliterated by the Blu-ray juggernaut.
As it is, both Microsoft's intervention and Sony's manufacturing problems - which were well-publicised in terms of how they affected the PS3, but seriously impacted standalone players as well - have given us the standards war of the past year. To a large degree, all that this has done is to delay the inevitable.
Even if the PS3 hasn't sold as well as Sony had hoped, it has still been successful in many territories, and Blu-ray's studio support has left HD-DVD high and dry.
There's even an argument in some quarters which says that Toshiba's aggressive price-cutting of the HD-DVD hardware (standalone players at one point were half the price of Blu-ray players, and the Xbox 360 add-on is remarkably cheap) has backfired, by turning players into games console-style loss leaders. This has prevented any other consumer electronics manufacturers from entering the marketplace with their own hardware.
The question at this point is not whether Blu-ray will triumph over HD-DVD, however. Nor is it whether the market will move away from DVD. Although it's generally accepted that this transition will be slow, not least due to the abysmal education of consumers regarding high definition products in general, it's also increasingly obvious that it is gathering momentum.
Instead, the question is whether Microsoft's meddling in the market (and the fortuitous, from its perspective, problems which Sony suffered with Blu-ray throughout 2006) has done enough to seed fear, uncertainty and doubt in consumers' minds about HD disc formats.
If the format war were to stretch past another Christmas, it could well be enough to give critical mass to digital distribution services; but that now seems unlikely.
Following Blockbuster's announcement this month that it will stock Blu-ray titles, but not HD-DVD, in response to consumer demand in trial locations, there are rumblings that Universal may finally throw in the towel and defect to the Blu-ray camp. This would almost certainly put a stop to almost any semblance of a format war long before Christmas.
Microsoft must now be hoping that enough has already been done to damage both next-gen disc formats in the public consciousness. The importance of this goal shouldn't be understated. If Blu-ray is largely unscathed and picks up strongly from HD-DVD's inevitable bow out of the market, Microsoft's digital distribution ambitions may be pushed back several years.
And as for gaming, astute followers of the market don't need to be told how important the establishment of Blu-ray as the de facto standard for high definition content is for Sony. If this happens, PlayStation 3's attractiveness as a consumer device will shoot up, and resistance to its high price will collapse. If it doesn't, then Sony's console will look stranded at an unsustainable price point.
Both sides have played their cards. Despite Microsoft's protestations of support for HD-DVD, the truth is clear; their true aim has only ever been to prolong the standards battle for as long as possible. One side believes in discs, the other side believes in downloads. Only time will tell which vision consumers are willing to embrace - and that decision will be very important in deciding the overall victor in the next-gen console battle.

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original link here:
http://www.gamesindustry.biz/content_page.php?aid=26216