Gizmodo reports Toshiba losing approximately $500 per A2 sold at $99

[aphex]

Originally Posted by Esox50

A $25MM "loss", while it may seem huge to some people, is really not a big deal. These companies are moving around Millions, and in some cases, Billions, every day.

If these are all old build date players, then the production of said players was a sunk cost anyway...

I agree with the person who said that the beauty of this is that HD DVD is just about out of options right now.

Given the Hollywood Reporter article from last week, I firmly believe that behind the scenes HD DVD has been given an ultimatum by WB. That is, sh!t or get off the pot...otherwise we'll make the choice for you (and go Blu).

For the record, I don't believe these players cost $600 to make...

it's a lot more than 25 million. What about their paramount bribe? Which shows they probably bribe a lot more. What about the newer players that are being stored now because nobody will buy them until they sell for 100 bucks? Toshiba has put way too much into this for a while now and soon they'll be in too deep.

[PaulGo]

A bit off topic but I just completed a survey for HDTV magazine. One of the "prizes was an Toshiba HD-DVD player paid for by Microsoft. I think Microsoft is subsidizing these Toshiba players in probably may creative ways!

[WickyWoo]

25 mil is nothing for toshiba. its better to take the loss from the firesale and have the potential to reach more people and get them into HD DVD than let them rot in warehouses.

That's exactly what it is. They have to get rid of them, so they combine it with a Wal-Mart ad blitz. Whole promotion might cost them $35-40 million, but the 2 weeks of buzz is worth it for them.

It's a last ditch desperation move

[Deane Johnson]

Originally Posted by krispydude

25 mil is nothing for toshiba. its better to take the loss from the firesale and have the potential to reach more people and get them into HD DVD than let them rot in warehouses.

True to a point, but there's always the side issue of it setting a new low price point in the consumers minds with a fire sale like this.

[darinp2]

As far as comments about Toshiba going bankrupt, we should keep in mind that Toshiba is a huge company. They're investing about $8.7 billion (that would be $8700 million) just in their semiconductor business.

--Darin

[dialog_gvf]

Originally Posted by WickyWoo

That's exactly what it is. They have to get rid of them, so they combine it with a Wal-Mart ad blitz. Whole promotion might cost them $35-40 million, but the 2 weeks of buzz is worth it for them.

It's a last ditch desperation move

It sure worked better than the $150 million to Paramount and DA. I'd say we got 10x the amount of hand wringing "oh noes the sky is fallin'" posts because of those A2s compared to Transformers.

Gary

[MerrickG]

Guys, I know we support bluray here, but do we honestly believe that Toshiba is losing $500 per player??? That number seems awfully high. Id guess that each player cost about $200 to make, but $500?

Um no.

[MotionBlurr]

Companies have "quarters" and "fiscal" years. Toshiba probably wrote it up as a loss for the fiscal 2006 year. But it will probably be a gain for their 2007 fiscal year from selling old inventory.

[Esox50]

Originally Posted by aphex

it's a lot more than 25 million. What about their paramount bribe? Which shows they probably bribe a lot more. What about the newer players that are being stored now because nobody will buy them until they sell for 100 bucks? Toshiba has put way too much into this for a while now and soon they'll be in too deep.

I was referring only to this player dump.

As far as the buying of Paramount, there are two things to understand there:
One, while I'm sure *some* cash changed hands you have to remember that it was really "promotional considerations". This could be anything from free advertising to free pressing of the discs, etc, etc. I suspect we'll never know. Remember some very preliminary retailer info had Transformers releasing on BD and HD DVD on 12/4/07. Do you still think Paramount is in "control" here?

Two, while we as BD supporters were not happy with Paramount, their decision makes sense. There is simply no way they were going to generate $150MM in value by releasing on BD over the next 18 months. And it's important to note that their biggest theatrical releas next year of Indy Jones is exempt from the deal. Basically, Paramount is going to make out on the deal no matter which way you look at it.

No worries though. Paramount will be back on Blu in the future. My biggest issue with this Paramount deal is that this means we'll get ported encodes from all of the releases over the next 18 months when Paramount is indeed forced to release on Blu down the road.

[RUR]

I dimly recall that at some point in the last few days a poster from Walmart(?) stated that their inventory system showed the A2 @ $198 with a margin of -26%. This should make the cost ~$267 and the loss at $98 = $170 per.

I'm doing all this strictly from memory and anyone is free to "Find that post"!

Here's the post: https://forum.blu-ray.com/showpost.p...1&postcount=39

[WickyWoo]

No worries though. Paramount will be back on Blu in the future. My biggest issue with this Paramount deal is that this means we'll get ported encodes from all of the releases over the next 18 months when Paramount is indeed forced to release on Blu down the road.

Notice how Paramount has switched to AVC encodes on HD DVD?

From what I'm told, this is so that they can encode for BR, and then create an "HD profile" version by just lowering the peak bandwidth where necessary.
This saves money for the compressions that are sitting on a shelf



This is not confirmed information, but would make a lot of sense.

[Deane Johnson]

Originally Posted by RUR

I dimly recall that at some point in the last few days a poster from Walmart(?) stated that their inventory system showed the A2 @ $198 with a margin of -26%. This should make the cost ~$267 and the loss at $98 = $170 per.

I'm doing all this strictly from memory and anyone is free to "Fnd that post"!

Something wrong there. I doubt Wal-Mart lost any money. What would be there motivation to do so?

[WickyWoo]

dimly recall that at some point in the last few days a poster from Walmart(?) stated that their inventory system showed the A2 @ $198 with a margin of -26%. This should make the cost ~$267 and the loss at $98 = $170 per.

Wal-Mart was certainly credited the difference by Toshiba

[bootman]

Devil's advocate:
How much does Sony lose on every PS3?

My point is "who cares?"

Can't we create better threads than these?

[Esox50]

Originally Posted by WickyWoo

Notice how Paramount has switched to AVC encodes on HD DVD?

From what I'm told, this is so that they can encode for BR, and then create an "HD profile" version by just lowering the peak bandwidth where necessary.
This saves money for the compressions that are sitting on a shelf



This is not confirmed information, but would make a lot of sense.

No sh!t?

[Marcusarilius]

Sometimes you have to know when to fold. Take your losses and go home. There will always be a new game another day but this HD DVD game is over for Toshiba, Micronuts and paramount.

[gbariel salassy]

Do you know I joined here because I was fed with the pro HD DVD stance of many forums.

But this is a ****ing childrens playground - do any of seriously think for one minute Tosh are losing $500 per machine - get out of fantasy land.

You know it really worried me that WB felt they had to respond to the last exclusivity rumour.

You're all going to harm this best format if you're not careful.

At which point I bow out before the ****ing wickytwat can ban me -I'm so disappointed in all of you.

If you want to win this use your heads and do it properly and stop being morons.

[Marcusarilius]

Originally Posted by gbariel salassy

Do you know I joined here because I was fed with the pro HD DVD stance of many forums.

But this is a ****ing childrens playground - do any of seriously think for one minute Tosh are losing $500 per machine - get out of fantasy land.

You know it really worried me that WB felt they had to respond to the last exclusivity rumour.

You're all going to harm this best format if you're not careful.

At which point I bow out before the ****ing wickytwat can ban me -I'm so disappointed in all of you.

If you want to win this use your heads and do it properly and stop being morons.

Ahhhh, Welcome new member to the land of BD Morons!

[sj001]

Originally Posted by gbariel salassy

Do you know I joined here because I was fed with the pro HD DVD stance of many forums.

But this is a ****ing childrens playground - do any of seriously think for one minute Tosh are losing $500 per machine - get out of fantasy land.

You know it really worried me that WB felt they had to respond to the last exclusivity rumour.

You're all going to harm this best format if you're not careful.

At which point I bow out before the ****ing wickytwat can ban me -I'm so disappointed in all of you.

If you want to win this use your heads and do it properly and stop being morons.

Yes, do us all a favor, and bow out. This is Blu-ray.com, not Hi-Def Media.com, comprende'?

[T-Wrecks]

IF short-term losses for long-term gains is the way to victory, then it WOULD be interesting to see 3 pieces of comparative statistical info. beyond the Nielsen ratings:

1. PS3 $ loss per unit by SKU.
2. Blu-ray Attach rate for PS3 vs. standalones vs. HD-DVD standalones.
3. Number of PS3s sold to date.

Toshiba has finally realized that getting the players into homes is the name of the game, and that Sony has been doing it since Nov 07. Not counting PS3s as standalones in the war is simply putting your head in the sand if you are HD DVD. They should have had this firesale 6 months ago if countering the PS3 effect was the goal. Now that they have made such drastic cuts, I'm sure CE manufacturers and studios are OVERJOYED...