WMS: PS3 to 'Win' Console War Because of Blu-ray

[Tekman]

http://biz.gamedaily.com/industry/feature/?id=16061

Wedbush Morgan Securities has issued a report on the video game industry for 2007 and beyond. Huge growth is expected, and analyst Michael Pachter believes the PS3 will ultimately win (just barely) thanks to the Blu-ray format, which he expects to defeat HD DVD.


In a massive 207-page report on the interactive entertainment industry for 2007, Wedbush Morgan Securities analyst Michael Pachter notes that while "the main driver of console hardware sales is the quality and quantity of the underlying available content," the high definition format war between HD DVD and Blu-ray could be a key factor in determining the console war outcome.


"Notwithstanding the efforts of the three console manufacturers to deliver compelling exclusive content, we expect the ultimate outcome of the console wars to be decided by the motion picture studios. Should the studios embrace Sony's Blu-ray standard for high definition DVDs, we think Sony will gain an insurmountable advantage over Microsoft; should the studios embrace Sony rival Toshiba's HD-DVD format, we think that Microsoft can maintain its first mover advantage and will dominate software sales for years to come," Pachter explained.


The wildcard, he said, will be "hardware manufacturers' ability either to develop content internally or to secure third-party commitments for software designed exclusively for a single platform." The playing field in this area is likely to be even for Microsoft and Sony, he said, while Nintendo will probably have the largest portfolio of exclusives.


So how does Pachter see the console war ultimately playing out? Despite Sony's early struggles with the PS3, he still believes Sony will come out on top.


"We expect the dominant console at the end of the next cycle to be the Sony PlayStation 3 (PS3), primarily due to our assessment that Sony will win the high definition DVD format war," he said. "However, we expect Microsoft's Xbox 360 to enjoy a first mover advantage for the next two years, capturing approximately 44% of U.S. and European combined next generation hardware unit sales by the end of 2007. We forecast the PS3 and Nintendo's Wii to capture approximately 21% and 35%, respectively, of the next generation hardware market in this same period. We forecast the Wii to take the lead in 2008, with 39% market share, and expect the race to even out in 2009, with all three console makers capturing between 30 – 37% of the overall market.


"Ultimately, we see Sony 'winning' the console war with 36% of the market, with Nintendo 'capturing' second place at 34% and Microsoft finishing third at 30%. We believe that this is essentially a dead heat, and each manufacturer will have sufficient market share to generate significant profits. These estimates do not include market shares in Japan, which we expect to be dominated by Nintendo (51% through 2011) and Sony (44%)."


Looking at the overall health of the industry, Pachter is forecasting the combined U.S. and European software markets to grow at a 16.1 percent CAGR from 2007 to 2009. WMS estimates that the addressable market opportunity for U.S. software publishers is a whopping $17.7 billion in 2007.


In a separate report from Lazard Capital Markets, analyst Colin Sebastian said he expects at least 15 percent software sales growth in North America this year. "We believe video game sales remain generally healthy year-to-date despite tougher year-over-year comps for the remainder of 2007," he said.

[BluThunder]

That's great news for Blu-ray and Sony.
The only negative thing in my opinion for Sony is: they should stop manufacturing the "so technically advanced PS3" in CHINA. It's just ugly to see a beautiful machine like this with a Made in China logo in the back; when instead it could carry a Made in Japan logo. Just where Sony comes from.




Strive for Made in Japan electronics.

[Ascended_Saiyan]

^^As long as quality parts are shipped to the Chinese installers, I don't see how the finished product could be much different. I think they are very adept when given quality components to assemble. IMO, a lot of companies that use Chinese labor don't concentrate on quality. They concentrate on keeping the price down by any means necessary.

That report is saying what a lot of us new already. Sony will win the console war.

[Tekman]

Apparently it isn't only Peter Dille who thinks that Microsoft's Xbox 360 Elite is an affirmation of Sony's strategy. GamesIndustry reports that Wedbush Morgan analyst Michael Pachter also sees the Xbox 360 Elite as a sign that Sony's game-plan was on target. Pachter explains:


Microsoft's move is an endorsement of high-definition output, and its inclusion of HDMI validates that Sony's initial strategy was correct.

...The 120 GB hard-drive is focused on helping the roll-out of IPTV, and I expect a progression of HDTV broadcast from the current 720p to the 1080p standard over the next few years, so the HDMI output will be relevant.

...On balance, this is a very smart move by Microsoft, but it appears to validate Sony's strategy, and serves as an acknowledgement that HD content matters.



Pachter sees the Xbox 360 Elite as a move by Microsoft to encroach on PlayStation 3 functionality, only this time, instead of offering an all-in-one package, Microsoft is giving consumers choices. Basically gamers get the option to get a system that has components relevant to their needs, at a price they're willing to spend.

Pachter goes on to say that Microsoft is probably seeing that Blu-ray will win the movie format war. Matt Martin of GamesIndustry speculates that given that Microsoft isn't offering an external HD-DVD drive as part of the Elite package is an omen of Microsoft's future plans: a Blu-ray drive for the Xbox 360 Elite.

Here's Michael Pachter's analysis:


It appears to me that Microsoft sees the writing on the wall – Blu-ray is going to win the format wars. ...Ultimately, Microsoft will likely offer a Blu-ray drive with the 360 Elite, and I think consumers will be able to select based solely upon other drivers.



At this point we feel that it is good to note that Blu-ray on Xbox 360 is starting to seem more likely as time passes. For one thing, Xbox UK boss Neil Thompson did note that "Whatever format wins it is highly likely we will offer a solution."

Pachter goes on to note that he hopes that Microsoft does not phase out the 20GB model, saying that he believes that most users will be perfectly happy with it. He also says that he believes that Microsoft is in a good position at the moment to lower the price of the US$ 399 version.
http://xbox360.qj.net/Michael-Pachte...g/49/aid/87851

[dakota81]

Originally Posted by BluThunder

That's great news for Blu-ray and Sony.
The only negative thing in my opinion for Sony is: they should stop manufacturing the "so technically advanced PS3" in CHINA. It's just ugly to see a beautiful machine like this with a Made in China logo in the back; when instead it could carry a Made in Japan logo. Just where Sony comes from.

Strive for Made in Japan electronics.

Hey, my PS3 is still running, while oh so many xbox 360 users have seen the red ring of death. Whatever Sony's doing right now seems to be working well, so stick with it, whether be it made in China or in Japan.

I only wish they kept the face of the PS3 black, the chrome plate just looks bad.

[dakota81]

Originally Posted by Tekman

<snip>
Pachter goes on to say that Microsoft is probably seeing that Blu-ray will win the movie format war. Matt Martin of GamesIndustry speculates that given that Microsoft isn't offering an external HD-DVD drive as part of the Elite package is an omen of Microsoft's future plans: a Blu-ray drive for the Xbox 360 Elite.

Here's Michael Pachter's analysis:

[B]It appears to me that Microsoft sees the writing on the wall – Blu-ray is going to win the format wars. ...Ultimately, Microsoft will likely offer a Blu-ray drive with the 360 Elite, and I think consumers will be able to select based solely upon other drivers.
<snip>

Sounds like nothing more than official rumors targeted to halt sales of PS3s. "Hey everyone, don't buy a PS3 for Blu-ray movies! We might be releasing an add-on drive of our own down the road!"

It's the same line Microsoft has been using for decades to stop people from buying other company's products - promises of integrating the technologies, then never actually delivering.

[The Don]

if MS is smart, they'd use the BD add-on to play certain games....or pretty much all the games that are on both systems..so they don't look like...COMPLETE fools..

[blublublu]

Originally Posted by The Don

if MS is smart, they'd use the BD add-on to play certain games....or pretty much all the games that are on both systems..so they don't look like...COMPLETE fools..

PS3 games will not be compatible with the XBOX 360, and vice versa.

[The Don]

Originally Posted by blublublu

PS3 games will not be compatible with the XBOX 360, and vice versa.

I am fully aware of this ahaha

I am saying for them to use bluray to read a 360 game that uses a BD....since the add-on is BD...

just because they didn't take advantage of HD-DVD, doesn't mean they'll overlook the advantage of BD when they need it to compete...

[airvick]

I doubt that when and if 360 comes out with blu-ray drive, that they will use blu-ray for games cuz that would just require everyone who has a 360 to get the blu-ray addon just to be able to play game. a lot of people would be very unhappy

[Musashi]

Originally Posted by The Don

I am fully aware of this ahaha

I am saying for them to use bluray to read a 360 game that uses a BD....since the add-on is BD...

just because they didn't take advantage of HD-DVD, doesn't mean they'll overlook the advantage of BD when they need it to compete...

A short history of disc drive/other add-ons:

TurboGrafx CD: Failure. Somewhat obscure system to begin with
Sega CD: Failure. Had some nice games, but financially, failure.
Genesis 32X: Failure.
N64 DD Drive: Failure.

Only successful add-on I can think of the GameCube Game Boy player, which wasn't an add-on per se, but another way of playing GB games that were already numerous.
Games made specifically for console add-ons are pretty much destined to flop financially.

The headline of the articel said PS3 to win b/c of blu-ray, but I think a more accurate headline would be 'PS3 to win b/c of Japan'. The article mentioned it, but yea, M$ has been thrashed in Japan, and with the rave reviews but lukewarm sales of Blue Dragon, that thrashing's not likely to change anytime soon.

[nobody]

It wouldn't be too bad to see the X360 grab the leading market share, cuz that would mean that all these stupid people are spending all their money for a less capable machine. They can play their 720P games all they want while I enjoy my high end big boy toys in full 1080P. I think it will be hella funny to see all these people get took by M$ again and again. It's so funny how all these people were complaining about the PS3 costing as much as it did and then they had to spend another $479 just to have HDMI compatibility when they don't even need it. From what I hear Component cables are good enough for 720P but not for 1080P. So why would you need HDMI for a 720P machine? Serves them right....LMAO! Now their HD-DVD Add-on is gonna go down the toilet also cuz of the Blu-ray Add-on. They're getting stuck left and right. You know what this means...the xbox 360 is pretty much shot by design, which mean we might be expecting another totally new console out. Which means the elite is a thing of the past as well.

[nobody]

WMS: PS3 to 'Win' Console War Because of Blu-ray no because they tired of getting shafted.

[The Don]

Originally Posted by Musashi

A short history of disc drive/other add-ons:

TurboGrafx CD: Failure. Somewhat obscure system to begin with
Sega CD: Failure. Had some nice games, but financially, failure.
Genesis 32X: Failure.
N64 DD Drive: Failure.

Only successful add-on I can think of the GameCube Game Boy player, which wasn't an add-on per se, but another way of playing GB games that were already numerous.
Games made specifically for console add-ons are pretty much destined to flop financially.

The headline of the articel said PS3 to win b/c of blu-ray, but I think a more accurate headline would be 'PS3 to win b/c of Japan'. The article mentioned it, but yea, M$ has been thrashed in Japan, and with the rave reviews but lukewarm sales of Blue Dragon, that thrashing's not likely to change anytime soon.

it's their only hope....in EU and US

unless they want to come out with another 'elite' in another year...

if they want to come out with DMC4, they really need to use the BD50 and not another DVD9 with a disc collection..

[xanoid]

Poor creatures. 360 has good games but it is like MS products.
Launch an average product and keep patching it till it hopefully work properly.

It is getting crazy with MS trying to match up with PS3.
Now if i want to play 1080p games I will need to get the elite. Morever if i want 1080p content i would have to spend another $$$$$$ on HD dvd player.
So the total Cost to average 360 owner who wants to be near PS3 technically=
$500 for the 1st 360(20gig drive (::::
$500 for the Elite (Just because of HDMI support+ added HDD)
$200 for HD dvd player======$1200 now i think the PS3 was more expensive or is it at $600?????
(In case of new buyer) $500 for elite + $200 for HD dvd=$750
We 360 owners have a POWER BRICK , external HD DVD drive, now isnt this so compact and easy to move haha.
FTW 360 lol
PS: I have all consoles and love all games so dont start fanboyishness on this page pls. Just stating the facts