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Analyst: Video Format Fight Not Over, Blu-Ray Winning PR War
Analyst: Video Format Fight Not Over, Blu-Ray Winning PR War
August 3, 2007 | By Leigh Alexander

August 3, 2007 | By Leigh Alexander
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TDG president and analyst Michael Greeson has recently published his opinions on the HD DVD-versus-Blu-ray wars, after attending a panel hosted by the HD DVD Promotional Group at the Electronics Merchants Association Home Media Expo 2007.

Greeson asserts that Blockbuster's decision to side with Blu-Ray "will have little impact on how the format battle is decided," calling Blockbuster "a blip on the DVD sales radar." He believes that Target and Wal-Mart's recent decisions to sell only Blu-ray players in their bricks-and-mortar stores could potentially be much more significant, though.

"The window of opportunity [for HD DVD] closes a bit more with each exclusive retail and content partnership that Blu-ray announces," Greeson says. "Radical moves will be required by the HD DVD camp, such as major equipment subsidies (slice the unit price to below $200 - soon) or significant marketing investment on the part of Microsoft, Toshiba, Universal, and the other HD DVD players (something which we have yet to see happen)."

Generally, though, Greeson believes the race is too soon to call, as some PC OEMs have yet to weigh in, and the impact of Target and Wal-Mart's exclusivity decisions won't be determined until after the holiday season.

Citing DVD player penetration stats at between 85% and 90% of households (with half of those owning two or more DVD players), he adds that "in June 2007, there were only 1.8 million high-def DVD players of any kind in use in the US. In other words, despite the fact that less than 1.3% of the 140 million stand-alone DVD players in US households have a high-def component, many have already declared a winner."

Greeson also states Blu-ray has a 5-to-1 advantage over HD DVD in terms of the number of units in use. But he notes that 1.4 million of the 1.5 million Blu-ray players in use today, 1.4 million are PS3s, and only 100,000 are true stand-alone non-gaming DVD players." The landscape will look very different when $200-$300 stand-alone high-def DVD players become the norm," he says.

Greeson's research has also found that less than 40% of console owners use them to view movies, and that 70% of them also own a stand-alone DVD player. According to Greeson, consumers have purchased 1.4 million HD DVDs and 2.0 million Blu-ray discs, "implying that the 1.5 million Blu-ray owners have purchased on average 1.3 Blu-ray discs. Among the 300,000 HD DVD owners, the attach rate is much higher - 4.7 to be exact."

Nonetheless, he says it's primarily a public relations battle at this stage. "Recent rumblings suggest that Blu-ray is outspending HD DVD 10-to-1 in terms of public relations and marketing, so it is not at all surprising to see that Blu-ray has achieved an early advantage while HD DVD is relying on guerilla tactics and face-to-face meetings to stake its claim," he says. "Given the recent Target and Wal-Mart wins, however, few are denying that Blu-ray has established undeniable public-relations momentum that will be hard for HD DVD to counter."

The complete TDG report can be found via the Diffusion Group's website.


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