May 9, 2006 12:57 PM PDT

Blu-ray a player in PlayStation pricing

The battle between Sony and Microsoft in the game console market won't hinge on price, analysts say. Instead, it will likely come back to Blu-ray.

Sony, which unveiled the specs and pricing of its PlayStation 3 at the Electronic Entertainment Expo in Los Angeles on Monday, will charge $499 and $599 for the consoles when they arrive in November.

Microsoft charges $299 and $399 for its Xbox 360, which debuted last year. It has shipped about 1.6 million and hopes to have delivered around 5.5 million by the end of June.

While it might look like Microsoft has a $200 advantage in price, the comparison is a lot more complex than it looks.

For example, Microsoft's $299 machine doesn't include a hard drive. The $399 Xbox 360, the more popular model, comes with a 20GB hard drive, making it similar in configuration to the $499 PlayStation 3.

More important, the Sony console comes with a high-definition Blu-ray DVD drive for playing movies. Standalone Blu-ray players are likely to cost close to $1,000 when they arrive later this year.

"The PlayStation 3 will look very inexpensive (compared) to the Blu-ray player," said Van Baker, an analyst at research firm Gartner. "You're paying 100 bucks for the privilege of having a Blu-ray player. It is a very aggressively priced movie player."

But that raises another question: Will consumers consider the movie question when buying the consoles?

"It's cheap for a Blu-ray drive and expensive for a game machine," said Stephen Baker, an analyst at NPD Group.

Trojan horse in living room
When the PlayStation 2 and Xbox launched in the '90s, analysts and reporters speculated that the consoles might be Trojan horses that enter the home as games machines but end up subsuming DVD players and home computers. The PlayStation 2 did help build awareness for the DVD format, but the takeover predictions didn't pan out. Sales of PCs and standalone DVD players continued to zoom.

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Both Baker and Baker said the price difference between a PlayStation 3 and a Blu-ray device could work to Sony's advantage, as people who want a Blu-ray player might decide to pick up the game console instead. Still, Sony will have to outline the value benefits clearly and will have to work hard to avoid confusing consumers, NDP's Baker said.

Many also believe that buyers will sit on the sidelines until the battle between Blu-ray and HD DVD formats to become established as the successor to DVD is worked out. Consumers, in fact, have voiced their concerns on chat boards and in reactions to stories.

"If you want to force these titans into reaching an agreement on a single format, just don't buy the product. I won't be buying a player until there is a single format," wrote CNET News.com reader Brian Grant in reaction to an article in January.

Thus, the potential advantage for Sony in offering a cheap next-generation movie player could be attenuated.

Microsoft, which supports the rival standard, plans to release an HD DVD add-on drive for the Xbox. While the price isn't known, the add-on will close the delta further between the two consoles.

Still, by making high-definition DVD capability an option, Microsoft doesn't have to market the Xbox 360 as a two-function device.

Appealing to the hard core
But Sony could benefit from another somewhat unusual circumstance of the game market. Hard-core gamers--the initial target market--really don't care about price, said Chris Crotty, an analyst at iSuppli.

"I don't think the price of the PlayStation 3 is too high," Crotty said. "Look at what people were willing to pay for the Xbox 360 when it first came out. People were paying over $1,000 on eBay."

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Both Microsoft and Sony have to subsidize their consoles. Each $399 Xbox 360 likely cost the company $525 in components alone last year, Crotty estimated. The subsidy on the PlayStation 3 is expected to run about $300 or $400. Declines in component prices, however, should eliminate the need for subsidies, and both companies will likely be able to sell their machines for profit in a few years, analysts predict.

Other factors will play into the mix as well. Both companies will have to woo developers to release games on their respective platforms. Sony will have an advantage in Japan, a country where Microsoft has always had difficulty making sales. Microsoft, however, has already been selling Xbox units briskly in North America and Europe.

But as far as the gaming experience is concerned--the key factor for gamers making early purchases--there doesn't seem to be anything fundamentally separating the rival consoles, analysts said.

"I can't see anything dramatically different between the two," Gartner's Baker said.

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Van Baker, Sony Playstation, Sony PS3, Blu-ray, console

53 comments

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Very misleading article
They imply that the cheaper $499 Playstation3 will allow playing blu-ray movies, which is not true. It will include the drive, but it will not have an hdmi output, which is required for it to work as a hi-definition blu-ray player. It will still play blu-ray movies, but in standard definition, not HD
Posted by nanuk2 (3 comments )
Reply Link Flag
Overall
I'm staying away. I'll wait. No wonder I've decided to retire from this
hobby.
Posted by fakespam (239 comments )
Link Flag
Very Misleading Article
They imply that the cheaper $499 Playstation3 will allow playing blu-ray movies, which is not true. It will include the drive, but it will not have an hdmi output, which is required for it to work as a hi-definition blu-ray player. It will still play blu-ray movies, but in standard definition, not HD
Posted by nanuk2 (3 comments )
Reply Link Flag
Not Exactly
The HDMI question is more complicated. Mandating the use of HDMI for full high def playback is an option of the Blu-Ray (and HD-DVD) formats. Whether the studios turn on that "software switch" on a specific DVD is still up in the air. I've heard that for the time being they agree not to turn it on. However, even when they turn it on, the down-convert is not to standard def. I believe the actual signal will be 960x540 if the studios turn it on, and if the player/monitor don't have hdmi.

mark d.
Posted by markdoiron (1138 comments )
Link Flag
Nope Not misleading...
You don't need HDMI to have HD. I've had a Sony 42" plasma for over 5 years which has the ability to show 1080i via component video in.

As long as you have component out, you can have Hi Def.
Posted by dargon19888 (412 comments )
Link Flag
Very Misleading Article
Why shouldn't it play movies in HD ?
Sony already announced that their Blu-ray players
will NOT downscale HD content on component cables.
Why should PS3 be different ?
Posted by lcrabs (9 comments )
Link Flag
Very Misleading Comment
Just read <a class="jive-link-external" href="http://ps3.ign.com/articles/614/614682p1.html" target="_newWindow">http://ps3.ign.com/articles/614/614682p1.html</a>
Posted by a20052006 (9 comments )
Link Flag
does drive = movie playback?
xbox 360 has an HD-DVD drive but it does not play HD-DVD movies by default... has it been officially announced that this machine will play Blu-Ray DVD movies?
Posted by jeffhesser (102 comments )
Link Flag
$499 ps3
The low end ps3 doesn't have hdmi output, which is supposedly necessary for the true high graphics output of the PS3. That, combined with the fact that none of the games appear to look better than the X360? Not good for Sony. It will be hard to sell it as a 'cheap' Blu-ray player, when that format requires hdmi and the $499 console won't have it.

As for the PS2's library contributing to the PS3's success? I think there have just been too many sequels, etc. There's nothing compelling in the back catalog that I can't play for $10 at a used game shelf in EB. It was a big deal with ps2 because there were a lot of great squaresoft titles released for the playstation that took a big investment in time, and consumer hadn't necessarily played them all. I don't feel that way anymore. The Xbox beat Nintendo last generation with NO back-catalog. That should tell us something.
Posted by solomonrex (112 comments )
Reply Link Flag
What happened to all the..
What happened to all of the Sony fanboys? They were every where before E3.... Maybe reality set in.
Posted by mrpeabody3119 (101 comments )
Link Flag
it will flop.
PS2 = $300 on launch day with DVD capabilities.

PS3 = $600 on launch day with Blu Ray capabilities.

On top of that, consider that there is probably less mainstream demand for Blu Ray in 2006 than there was for DVD in 2000.

It's an easy equation to compute: the PS3 is going to flop hard.
Posted by Jeema (23 comments )
Reply Link Flag
you wish...
The PS3 is going to be a major impact on the living room over the next 5 years. I guarentee it. People said the PS2 wouldn't bring DVD's to the mainstream, yet it did. IT was the first DVD player for MILLIONS of people, and look what's happened with DVD? It's boomed. Bluray will be no different.
Posted by (461 comments )
Link Flag
Choices
Choices, Sony's profit projections are based on taking the lions share of the market, with basically revamped box office movie bombs, and limited software titles, a truly big ask for an untested unproven device in the wild, when fighting against well seasoned competitors!

Oh well, if it fails to live up to expectations, then for Sony , the only path is downhill!
Posted by heystoopid (691 comments )
Reply Link Flag
Whoever wrote this Story......
is missing a major issue, HDMI 1.1 and HDMI 1.3.

google "HDMI 1.3" and you'll see what I mean.

and to the person who wrote this story, tsk tsk.
Posted by (16 comments )
Reply Link Flag
what are you talking about?
Where in this article does it mention HDMI? It doesn't, so what are you ranting about?
Posted by mortis9 (370 comments )
Link Flag
what are you talking about?
Where in this article does it mention HDMI? It doesn't, so what are you ranting about?
Posted by mortis9 (370 comments )
Link Flag
How much will the PS3 Network Live cost?
The story fails to mention the add on costs. This is just the base price. PS3 is too expensive and what about the game titles how much are they going to cost?

Sony = ripoff
Posted by (19 comments )
Reply Link Flag
Message has been deleted.
Posted by Dachi (797 comments )
Reply Link Flag
Here in Texas
The PS3 would cost me $646.92 wait now you need a game.... $63.72 awww crap now your friends and brother want to play, another controller $52.92.
Alright now lets just assume you buy a movie so you can "use" your blue ray $43.20.

So far you own one game, one movie, 2 controllers... let me ring that up for you sir,
"That wil be $806.76 how would you like to pay for that? Cash, Check, or Charge.

HAHA I hope you buy the PS3.
Posted by mrpeabody3119 (101 comments )
Link Flag
You can upgrade an Xbox 360
The writer forgot to mention one tiny little detail.... You can upgrade a core by buying a hard drive for the 360.

If you buy a base level PS3 and then you want Hi-Def and the other little tidbits that aren't included in the base model; you get to pay for a new system.

So it's NOT like the 360 as otherwise implied.
Posted by CaptainFreeJack (1 comment )
Reply Link Flag
HDMI,Component,DVI,VGA,ect all HD~
Component that is available on all current generation systems is also available on next generation systems with a reasonable 1080i/720p. Although it will probably not be next gen HD capable.
Posted by a20052006 (9 comments )
Link Flag
PS3 Can be "upgraded"
The utilization of the system's USB ports allows for additions like a USB card reader, or a USB wireless stick.

With accessories like the above, the only real difference is the 40GB difference in hard drive size and not being able to go to 1080p. Using component out, you can get to 1080i, which is good enough for the majority (right now) of HD TVs out presently.

The extra $100 gives you the future proofing for those HD TVs that allow 1080p, if you happen to have one. Plus, not having to accessorize (as above).

Personally, while $599 is a bit high, it's in-line with the capabilities of the machine: games and movies, HD and Wi-Fi. IMHO that is.
Posted by mmukalian (4 comments )
Link Flag
Blu-Ray must be better than DVD
Definately Blu-Ray is better than DVD in offering more capacity and better visual clarity in movies but for video games that doesn't mean anything. In video games, it all depends on the programming and the processors to create hi-def gaming, for example 360 - still using the DVD format - can still create hi-def gaming content because of the data in its game dvd and the components in its system.

For Blu-ray, in fact PS3, to be the better machine, has to do more with in terms of gaming.
Standard DVDs can hold about more than 40 hrs. of gameplay, depending on how complex the game is designed to be, though there have been instances that where a game needed more than one DVD to hold all its content (I think this was GTA: Vice City on PS2 - it's been a long time ago) - Blu-ray has to be used to hold those type of games.

Also Sony should push for publishers to give gamers "extras" - "dropped" playable stages, alternate endings, downloadable wallpaper, "behind the scene" stuff, trailers, music that can be transfer to media (with copyright protection), etc. - like "Special Edition" home video movies; bascially use Blu-ray to its full storage capability, where a game like "Metal Gear Solid 2: Subsistence" would need two DVDs to hold content, instead there would only be one Blu-Ray DVD for Subsistence.

My Tow Cents,
Ned
Posted by techned (200 comments )
Reply Link Flag
What is the big deal with Blu-ray?
If you still have a non-HDTV then the noticable quality difference will be... 1%!

If you do have a HDTV but with a small screen, the increase in quality will be approx... 5%!

So why pay $1200CDN+ for the player or $900CDN for a PS3 just to watch movies which cost $40-50CDN that have no real increase in quality over DVD on your cheap little television?

Basically, if you do not have a HDTV over 35" which can display 1080p then it is a huge waste!
Posted by TheShane (55 comments )
Reply Link Flag
Since when
does 599$ US become 1200$ CDN? The exhange is about 1.15 now... even lower...
Posted by volterwd (466 comments )
Link Flag
What about Xbox's media extender?
The one thing that's not mentioned is the media extender component of Xbox 360... this could prove to be a big differentiator in favor of Microsoft - particularly for early-adopter home networked households.
Posted by tduboise (1 comment )
Reply Link Flag
Media extender is great..
My only issue with it is the reliance on MS's propriatary formats when streaming content. Other than that(please let us stream divx without a workaround), kudos to MS.
Posted by Rolndubbs (194 comments )
Link Flag
Yeah, Microsoft is way smarter on this
What people really want is a easy way to show movies in the living room TV that they have on their computers (legally obtained, of course). Who cares about resolution? When I watch a film I pay attention to the plot, not the pixels on the screen.

I still remember a bet I made near ten years ago with a co-worker, who happened to be a serious audiophile. He was certain that DVD-audio was going to the next best thing, while I put my money on MP3, which was emerging just then. I don't have to tell you who won the bet. I see the same scenario playing out with video.
Posted by Chung Leong (111 comments )
Link Flag
This is a great feature
I have 3 XP PC's all hooked up to my 360. It took maybe 5 minutes per PC to set up and works great!
Posted by PhillyBoy919 (126 comments )
Link Flag
Blu-Ray's only hope
This actually anges me greatly to see sony using it's faithful gamer fans to force the adoption of a format that the industry would likely have abandoned. movie studios are losing cash hand over foot making movies for the PSP but sony has convinced them that just because they have sold many PSP's they should continue to waste their money producing movies in this format!?! So now sony wants Blu-Ray to be it's format of choice in sony's movie world so they are going to make an attractive offer to movie studio's when they have sold millions of Blu-Ray ready DVD player's to people that had no plan to support a movie format one way or another.
Posted by jeffhesser (102 comments )
Reply Link Flag
Cost to purchase - barrier to entry
Let me figure this out:

$1000 for a new blu-ray player (from the article)
$600 for a PS3

Seems like an easy choice for HD player however:
$500 for an HD-DVD player (available now)
$300 or less for HD-DVD player when PS3 launches

My guess is that unless the Blu-Ray players are priced exactly the same as the HD-DVD players, Blu-Ray will lose out.

Would your parents buy a PS3 rather than a dedicated HD-DVD player to save money. Mine wouldn't because they wouldn't know how to deal with the game console. The majority of consumers of HD gear will be non-gaming people.

The battle for Hi Def DVD's will be decided by the general public.

One more thing: Name a successful Sony proprietary technology....

Beta tapes - Nope
Mini-disc? Nope
Memoroy stick - Nope
ATRAC3 - Nope
UMD - Nope

I am sure there are some others I am missing. You get the point.
Posted by brothe (22 comments )
Reply Link Flag
Too expensive
I disagree with the analyst comments "The battle between Sony and Microsoft in the game console market won't hinge on price, analysts say. Instead, it will likely come back to Blu-ray."

For me, a casual gamer, its totally about price. The Nintendo Wii is reportedly $200 according to a comment by the VP of Sega, for that price I wont even think twice about buying one, especially considering the innovative features of the console, but theres NO WAY I can justify $600 for a console, even if it does come with a fancy unproven movie player.

I'd also rather buy an Xbox 360 for $200+ less and use that money to maybee buy a HD-DVD or Blu-ray player when the prices come down, depending on which format succeeds, if either of them do.

I couldnt care less about being forced to buy into buying a movie player when buying a console, as consoles have never been good movie players in the past.
Posted by niceyuk (14 comments )
Link Flag
Name a successful proprietary Sony technology?
Beta - yes, for professional use!
Compact Disc - yes, codeveloped with Philips
SACD - yes, for audiophiles. also codeveloped with Philips


The last two are supported standards now!
Posted by ddesy (4336 comments )
Link Flag
I'm for Blu-Ray.
Speaking seperately from its use on PS3 - I'm definately for the Blu-Ray format for the future of DVD.

It's ineviatable that HD TVs, players, and recorders are coming - heck, Congress made legislation that HD will be the new standard within 5 to 8 yrs when it opened up the higher transmitting airwaves just last year.

A new media format is going to be needed to take on this new form of content and HD-DVD is too short-term and short sighted to be that future format.

If you check out these two sites -

<a class="jive-link-external" href="http://www.hddvd.org/hddvd/difformatsblueray.php" target="_newWindow">http://www.hddvd.org/hddvd/difformatsblueray.php</a>
<a class="jive-link-external" href="http://www.blu-ray.com/faq/" target="_newWindow">http://www.blu-ray.com/faq/</a>

Blu-Ray in not a Sony propriety standard but an industry wide standard that was created by the nine leading electronics companies -

Hitachi, Ltd.
LG Electronics Inc.
Matsushita Electric Industrial Co., Ltd.
Pioneer Corporation
Royal Philips Electronics
Samsung Electronics Co., Ltd.
Sharp Corporation
Sony Corporation
Thomson Multimedia

I think it was dumb for MS to become involved in the DVD format war. As the force behind the most dominant OS - Windows - MS should have stayed above this and just wait for a clear cut winner; the 360 is a damn good machine, capable of playing standard DVD - ti doesn't need to be part of it until the next Xbox.

Sony should have also just put a regular DVD player in PS3 and just put an add-on at a later date but it also has a lot invested in Blu-Ray so its an acceptable risk to add it to PS3.

Let the games determine the winner of the console wars but my bet is on Blu-Ray being the new DVD standard.

My Two Cents,
Ned
Posted by techned (200 comments )
Reply Link Flag
A good guy
Ned you're a good guy
Posted by *Porter* (14 comments )
Link Flag
Corrections on HD
1) Congress has mandated *digital* OTA signals, not HD. Broadcasters may choose to use that increased bandwidth for more HD content, or they may just broadcast more SD content (1 HD channel = 6 SD channels). So far they've mostly chosen the latter.

This has nothing to do with the *physical* media format.

2) I don't understand the "HD-DVD is too short-term" comment; both BD and HD-DVD are capable of supporting 1080i, which should be sufficient for the next five years or so. Virtually all "hi-def" TVs and broadcasts are currently 1080i.

(Then again, what do I care -- my TV is 15 years old, and doesn't even have RCA jacks; but I don't plan to upgrade until it quits working.)

3) Microsoft *did* decide to sit this format war out, for the most part. There will be an HD-DVD player add-on for the Xbox360; but they can just as easily ship a BD player if that format takes off.

4) Sony, on the other hand, has inextricably tied their fortunes to Blu-ray. That's a HUGE bet, and one they're likely to lose -- MS can afford to subsidize the 360 for a lot longer than Sony can afford to subsidize the PS3.
Posted by FaithAndReason (2 comments )
Link Flag
And the Magic 8-Ball Sez ...
"Reply hazy, try again." OK, so I did, and I got, "Concentrate and ask again." Hmmm, there's a trend here, so let's try it again, and we get, "Better not tell you now." This is getting frustrating, but let's give it another chance to redeem itself, and it says, "Cannot predict now." Well, let's give it a good shake, just one more time, and the final answer is, "Ask again later." Well, so much for the hi-tech approach to answering this 64 billion dollar question (which is probably how much money will be lost by both Microsloth and Stony, by the time the bloodletting is complete).

So, we'll just have to stick with good ol'-fashioned punditry until the 8-Ball is feeling more assertive. Given that the uptake on HDTVs has been behind the 8-Ball, so to speak, compared with the original estimates (which are always way too high, like the marketing weenies are who actually still get paid by foolish corporations to come up with such ridiculously-rosy estimates in the first place), I believe we can expect that purchases of game consoles by the general public (i.e., non-bleeding-edge, non-gamers) for the primary or secondary use of an HD player will be correspondingly low, especially since these people have no idea that current DVDs aren't full Hi-Def in the first place (well, at least nothing approaching 720p, much less 1080i/p). They believe that any content that fills an HDTV screen without being squashed, stretched, or otherwise bent, folded, spindled, and mutilated (and particularly if they don't have to do any manual intervention selecting a resolution/format), must be from a Hi-Def source. That's just one of the many marketing problems that HDTV manufacturers are having to surmount in their quest to put an HDTV in every pot, garage, etc.

Since so many people in the general public are quite happy with their choice of DVD player(s - plural, in many cases, when you count the DVD-/+R/-/+RW drives in their computer(s), the portable/automotive DVD player(s) bought to keep Johnny and Suzy (or Beau and Britney, or whatever kids are being named this week) quiet in the back seat of the family Stupendously Uneconomical Vehicle), they're just not going to be interested in buying a high(er)-def player, especially in a $500 ~ $600 game box (although Johnny and Beau might get excited about it if they're complete twidget freaks) that can only be used for one function at a time.

While Blu-Ray does appear to have a longer-term vision for larger capacity (60GB+, maybe 100GB+ in a couple of more years, in production quantities) than HD-DVD, that's probably not going to be an issue until and unless -/+R/-/+RW drives become available at the current prices of DVD-/+R/-/+RW drives (i.e., Hell is going to have to give up a lot more BTUs in the form of Global Warming/Climate-Change before this will become possible), and it will only become a big deal for the early-adopter/bleeding-edge twidget types, especially for the first couple of years of availability. Then, there's the whole issue of DRM in its varied forms between the two formats - will normal people just wait out the format war for a winner? I don't know if its technically even feasible for an eventual dual-format merger, ala the eventual CD/DVD-/+R/-/+RW coalescence, especially from a DRM perspective (given the differences in firmware that may be burned in on the single-format drives - I doubt that will ever be in flash memory, or other rewritable format). Perhaps it's possible for the disks to carry some new combination along with the content (it would take up essentially no room, compared with the size of the content data). Then, there's the issue of which studios are supporting each format, but their relative sales of discs varies enough over time that it's impossible to pick a winner based solely on that criterion (studios are routinely going from bang to bust in the space of just a few years - Miramax would have gone under if "The Lord of the Rings" trilogy had been a flop, but Disney's purchase of Miramax before TLOTR was completed made that question moot).

As for add-ons to game boxes, that market has always been decidedly small. Most people wait for the inevitable slide in prices before they even buy the box, much less peripherals that have historically presented a mess in the living/family/entertainment/whatever room (although the steady influx of wireless accessories does ameliorate that problem somewhat). After the early-adopter/bleeding-edge folks have shot their wads on the latest-and-greatest hardware (which frequently does include some accessories), the vast majority of mainstream consumers are very price conscious, and sales of accessories typically never break a 10% fraction of box sales (most never get above 1%), especially for third-party accessories (which are expensive and difficult to develop, particularly since you pretty much have to have the box manufacturers blessing and technical assistance to do anything - for which the box makers extract a hefty tribute - it's all part of the very traditional "make the money on the blades/film, not the razor/camera" business plan). So, add-on HD-DVD players are probably not going to be a big seller, especially given the previous points about consumer happiness with the DVD players they already have (not to mention the huge libraries of DVDs they are most likely not going to replace with HD-DVD or Blu-Ray copies of what they already own).

The incremental backward compatibility with existing DVDs that HD-DVD provides could be a significant factor, if all others come to a draw. Some have pointed to the incrementally higher cost of Blu-Ray drives and media over HD-DVD, but history shows that such differences, over the lifetime of a format, aren't all that important (it was the longer recording times, at a visible, but not dramatically reduced level of recording quality, that were possible on VHS, vs. Betamax, that consumers went for, not the initially small price difference). If history is any guide, the VHS vs. Betamax war indicates that the higher capacity of Blu-Ray may be the long-term winner, based on this difference, but it's going to take years for that to play out (pun fully intended).

There's more I could delve into, but no one's read this far, anyway, so I'm going to go get something to eat, and sit down to watch some 1080p HD content on my 120-inch diagonal Megascreen 6000 HDTV projection system, with Megascream 9000 7.3 audio! ;)

All the Best,
Joe Blow
Posted by Joe Blow (175 comments )
Reply Link Flag
Twidget?
Definition, please?
Posted by ddesy (4336 comments )
Link Flag
 

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