Nintendo drops Wii price to $199

http://news.cnet.com/8301-17938_105-10360550-1.html

September 23, 2009
Nintendo drops Wii price to $199
by John P. Falcone

Nintendo has officially announced that the price of the Wii will drop to $199.99, effective on Sunday. The long-rumored $50 price cut comes in the wake of recent price drops for the PlayStation 3 ($299, with built-in Blu-ray player) and Xbox 360 ($299 for the 120GB version with built-in DVD player and Netflix support), which have boosted sales of the Sony and Microsoft consoles. (To date, the Wii remains the best-selling home game console of the three.)

Other than the price cut, there are no other changes to the current Wii bundle--you're still getting the console, along with the Wiimote and Nunchuk controllers and the bundled Wii Sports game. By contrast, there's at least one rumor that the U.K. will get a Wii package that adds the MotionPlus peripheral and Wii Sports Resort to the mix. Meanwhile, white remains the only color choice in North America (Japanese consumers can choose black as well).

Nintendo also took the opportunity to officially announce the release date for New Super Mario Bros. Wii, which had previously been slated for a vague "fall 2009" window. The multiplayer Super Mario game will hit store shelves on November 15.

Sony slashes price of PlayStation 3 by $100

http://www.latimes.com/business/la-fi-playstation19-2009aug19,0,2690520.story

Sony slashes price of PlayStation 3 by $100 to $299
The Japanese electronics giant, which is seeking to boost sales ahead of the crucial holiday shopping season, also unveils a sleeker, thinner model of the game console.
By Alex Pham and Ben Fritz
August 19, 2009

Sony Corp. slashed $100 off the price of its entry-level PlayStation 3 game console to $299 on Tuesday in an effort to goose sales ahead of the crucial holiday shopping season.

The Japanese electronics giant also unveiled a thinner model of the PS3 that packs a 120-gigabyte hard disk drive. The newer model, 36% smaller and 32% lighter than the 80-gigabyte version, is expected to hit store shelves by Sept. 1. The 160-gigabytye PS3 also took a price cut, and is now $399.

"This is a game-changing moment for us," Peter Dille, Sony's senior vice president of marketing, said in an interview. "There's a lot of pent-up demand for the PS3. It's been a tough economy, and a lot of people have been sitting on the fence waiting for the price cut."

The move was widely anticipated by a number of analysts, who said a price cut could help Sony regain momentum.

"A price cut is long overdue on the PS3," Colin Sebastian at Lazard Capital Markets said. "We expect an uplift in unit sales. But the question longer term for Sony is whether they can sustain market share gains, especially when competing platforms, such as the Xbox 360, lower their prices as well."

Although the PlayStation 2 was the dominant console of the last generation of devices, the PS3 so far has lagged behind Microsoft Corp.'s Xbox 360, which has sold more than 30 million units worldwide, and Nintendo Co.'s Wii, which has sold more than 50 million consoles. Sony, meanwhile, has sold roughly 24 million PS3s as of June 30.

One of the main reasons has been the PS3's price: Sony launched the PS3 at $599 in November 2006. It lowered the price two years ago to $399, but that was still more than the Xbox 360, whose entry-level model cost $199, and the Wii, priced at $249.

Sony has maintained that the PS3's built-in Blu-ray disc player justifies the expense.

"Even in the tough economy, families have been reluctant to give up their at-home entertainment," Dille said. "For $299, you're getting a game machine, a Blu-ray player and a 120-gig hard drive you can use to download movies. It's a tremendous value."

Many in Hollywood have been eagerly awaiting a PS3 price cut in hopes it would boost sales of high definition Blu-ray discs at a time when the overall DVD market is contracting.

Blu-ray disc sales rose 91% in the first half of the year to $407 million in the U.S., according to the Digital Entertainment Group, an industry trade organization. However, that's still a tiny percentage of overall consumer spending of $9.73 billion on home entertainment in the same time period. The Blu-ray disc sales also did little to alleviate an overall drop of 13.5% in disc purchases.

alex.pham@latimes.com
ben.fritz@latimes.com

VHS era is winding down

http://www.latimes.com/entertainment/news/la-et-vhs-tapes22-2008dec22,0,5852342.story

VHS era is winding down
The last big supplier of the tapes is ditching the format, ending the long fade-out of a product that ushered in the home theater.
By Geoff Boucher
December 22, 2008

Pop culture is finally hitting the eject button on the VHS tape, the once-ubiquitous home-video format that will finish this month as a creaky ghost of Christmas past.

After three decades of steady if unspectacular service, the spinning wheels of the home-entertainment stalwart are slowing to a halt at retail outlets. On a crisp Friday morning in October, the final truckload of VHS tapes rolled out of a Palm Harbor, Fla., warehouse run by Ryan J. Kugler, the last major supplier of the tapes.

"It's dead, this is it, this is the last Christmas, without a doubt," said Kugler, 34, a Burbank businessman. "I was the last one buying VHS and the last one selling it, and I'm done. Anything left in warehouse we'll just give away or throw away."

Dumped in a humid Florida landfill? It's an ignominious end for the innovative product that redefined film-watching in America and spawned an entire sector led by new household names like Blockbuster and West Coast Video. Those chains gave up on VHS a few years ago but not Kugler, who casually describes himself as "a bottom feeder" with a specialization in "distressed inventory."

Kugler is president and co-owner of Distribution Video Audio Inc., a company that pulls in annual revenue of $20 million with a proud nickel-and-dime approach to fading and faded pop culture. Whether it's unwanted "Speed Racer" ball caps, unsold Danielle Steel novels or unappreciated David Hasselhoff albums, Kugler's company pays pennies and sells for dimes. If the firm had a motto, it would be "Buy low, sell low."

"It's true, one man's trash is another man's gold," Kugler said. "But we are not the graveyard. I'm like a heart surgeon -- we keep things alive longer. Or maybe we're more like the convalescence home right before the graveyard."

The last major Hollywood movie to be released on VHS was "A History of Violence" in 2006. By that point major retailers such as Best Buy and Wal-Mart were already well on their way to evicting all the VHS tapes from their shelves so the valuable real estate could go to the sleeker and smaller DVDs and, in more recent seasons, the latest upstart, Blu-ray discs. Kugler ended up buying back as much VHS inventory as he could from retailers, distributors and studios; he then sold more than 4 million VHS videotapes over the last two years.

Those tapes went to bargain-basement chains such as Dollar Tree, Dollar General and Family Dollar, and Kugler's network of mom-and-pop clients and regional outlets, such as the Gabriel Bros. Stores in West Virginia or the Five Below chain in Pennsylvania. If you bought a Clint Eastwood movie at the Flying J Truck Stop in Saginaw, Mich., or a "Care Bears" tape at one of the H.E. Butts Grocery stores in Texas, Kugler's company probably put it there. He also sells to public libraries, military bases and cruise ships, although those clients now all pretty much want DVDs.

Kugler estimates that 2 million tapes are still sitting on shelves of his clients' stores across the country, but they are the last analog soldiers in the lost battle against the digital invasion. "I'm not sure a lot of people are going to miss VHS," he said, "but it's been good to us."

If you rewind back to the 1980s, VHS represented a remarkable turning point for the American consumer. For the first time, Hollywood's classics and its recent hits could be rented and watched at home.

"It was a sea change," says Leonard Maltin, the film critic and author who has written stacks of books to meet the consumer need for video recommendations. "Hollywood thought it would hurt movie ticket sales, but it didn't deter people from going to movies; in fact, it only increased their appetite for entertainment. Hollywood also thought it would just be a rental market, but then when someone had the idea of lowering the prices, the people wanted to own movies. They wanted libraries at home, and suddenly VHS was a huge part of our lives."

The format was easy to use (although fast-forwarding and rewinding to any particular spot was the worst new-tech irritant since the telephone busy signal) and, of course, the videocassette recorder and blank VHS tapes made it possible to catch up on any missed must-see TV, whether it was "Days of Our Lives" or "Monday Night Football." Hollywood found that movies also enjoyed a second opening weekend, as viewers throughout the country made Friday night trips to the rental store for new releases.

"I think in some ways it even pulled families together, if that doesn't sound too corny, because renting movies became such a part of the weekend," says Jim Henderson, one of the owners of Amoeba Music, the 45,000-square-foot merchant in Hollywood that sells pop culture in just about every format imaginable, including VHS. "It was also a great thing for film fans. You could educate yourself and go back to the well again and again. We're used to choice now, but that was the first time fans could watch what they wanted when they wanted."

Amoeba no longer buys VHS from distributors such as Distribution Video Audio. But customers bring in tapes every day to trade and sell. "We actually sell maybe 200 a day, almost all of them between $1 to $3," Henderson said. "Almost the same amount comes in as goes out."

A lot of those are the classic or foreign films that are not available on DVD, such as "The Magnificent Ambersons" or Gregory Nava's "El Norte," or vintage music videos by punk bands or new wave pioneers such as Black Flag or Siouxsie and the Banshees. Some older customers simply don't want to switch to DVD, others just like the bargain-basement price of the tapes.

But, Henderson said, unlike with vinyl records, no one seems to cling to VHS for romantic reasons.

"DVDs replaced VHS really fast compared to other format changes through the years," Henderson said. "VHS took too long to rewind, they were boxy and cumbersome, the picture was kind of flawed. The tape inside was delicate and just didn't hold up. DVD just blew it away."

It's true, the VHS tape never really had a chance once the DVD arrived in the late 1990s with all its shiny allure -- higher quality image, nimble navigation and all that extra content. After a robust run at the center of pop culture, VHS rentals were eclipsed by DVD in 2003. By the end of 2005, DVD sales were more than $22 billion and VHS was slumping badly but still viable enough to pull in $1.5 billion. Next year, that won't be the case.

Just before Halloween, JVC, the company that introduced the Video Home System format in 1977 in the United States, announced that it would no longer make stand-alone videocassette recorders. The electronic manufacturer still produces hybrid VHS-DVD players, but it's not clear how long that will last.

For a format that made Hollywood so much money, VHS leaves behind a shallow footprint in the movies themselves. There was "The Ring," a 2002 horror movie and its 2005 sequel, about a mysterious VHS tape that brings death to whoever watches it, but that's a sad valentine. This year Jack Black and Mos Def starred in "Be Kind Rewind," a loopy comedy that finds its center at a VHS rental store that is holding out against the DVD era, but the rebellion didn't go beyond the script -- the movie is available for rent or purchase on DVD and Blu-ray, but it was never released on VHS.

The format was also name-checked in "The 40-Year-Old Virgin," the 2005 hit film that stars an unloved salesman at an electronics store; and even he has no room in his heart for the underdog format. "It's a dead technology," he explains to a customer. "It's like buying an eight-track player."

Kugler is one of the rare people who can stir up some nostalgia for the black, boxy tapes. His father bought Distribution Video Audio in 1988 and carved out a niche as an inventory supplier for the video rental stores that were popping up everywhere. His young son was interested in a different end of the entertainment business; the younger Kugler spent many afternoons in his teen years sneaking onto the Paramount Pictures studio lot and soaking it all in. While watching the cast at work on "Planes, Trains and Automobiles," he decided he wanted to become a filmmaker; soon, the kid who was always underfoot on the "Cheers" set even coaxed Ted Danson to appear in a two-minute film he made.

But life took Kugler on a less glamorous path. He started working at Distribution Video Audio in 1991 and in short order took the company to new heights by negotiating directly with studios to buy their overrun inventory.

The approach led the company beyond VHS, and soon Kugler's warehouses were filling up with CDs, books and merchandise like "CSI: Crime Scene Investigation" wristwatches and "America's Next Top Model" T-shirts.

A casual observer might wonder how much shelf life those sorts of products could possibly have, but Kugler has moved hard to the Internet and says the "scavenger culture" mentality and sites such as Half.com, Amazon Marketplace and EBay have made it easier than ever to match narrow-niche and oddball customers with the products they want -- especially when it's priced to go at $2 or $3.

With some things, though, even Kugler the great salvager can't find a buyer no matter how low he goes. He took a loss on 50,000 copies of "Yo-Yo Man," a Smothers Brothers instructional video for the stringed toy. ("I'm not sure what I was thinking on that one," Kugler said.) And then there is that stash of VHS tapes that couldn't even earn a spot on the last shipment out of his warehouse: a few thousand copies of "The Man With the Screaming Brain," a 2005 horror movie about a mad scientist, a Bulgarian tycoon, a cab driver and some cranial misadventures. ("That one," Kugler said, "will be buried with us.")

The majority of his firm's business today is with big box retailers including Target, Wal-Mart, K-Mart and Sears, where the company sets up displays of its discounted DVDs, such as "Superman Returns" and "Proof of Life," which are often priced at $10 or less. Plenty of customers see that price as an invitation to build up their DVD collections.

But Kugler, with a sly smile, offered a warning to consumers thinking of putting up shelving to handle their burgeoning libraries.

"The DVD will be obsolete in three or four years, no doubt about it. Everything will be Blu-ray," Kugler said, anticipating the next resident at his pop culture retirement home. "The days of the DVD are numbered. And that is good news for me."

geoff.boucher@latimes.com

Unexpected tech trends and predictions for 2009

http://tech.yahoo.com/blogs/null/111734

Unexpected tech trends and predictions for 2009
Christopher Null: The Working Guy
Sun Dec 14, 2008

People will buy iPhones. Intel will introduce more powerful microchips. Video games will continue to be popular.

Predicting what will happen in the tech world in 2009 isn't all that tough: The big trends are plain as day, and it doesn't take a psychic to forecast some of the more mundane happenings.

But what about some of the less obvious developments that tech 2009 will bring? I put on my Carnac hat this weekend with the hopes of offering some insight into the unexpected, less hype-fueled, and more obscure happenings we're likely to see in the year ahead, technology-wise. Weigh in in the comments section to let me know if you agree or disagree!

GPS Everywhere - With the exception of super-cheap gear, GPS is going to explode in 2009. Cell phones won't just incorporate GPS nearly universally, you'll see GPS move into more and more other gadgets, including cameras and even hybrid MP3 player and other devices. And applications that make use of GPS technology -- as we're seeing the start of with the iPhone and Android -- are going to grow rapidly. But fundamentally, people will ask in droves: Why buy a standalone GPS unit when your phone does the job just as well?

Blu-ray Ascending - It pains me to predict this, but I believe Blu-ray is going to grow in popularity and market share vs. DVD. Why? Manufacturers are likely to aggressively cut prices on hardware and discs, which is about the only thing that will get consumers to buy this stuff. They have to: Otherwise Blu-ray risks fading away altogether. That said, the overall market for packaged media will likely shrink in '09, with DVD taking the bulk of the hit.

Video on the Go - Watching TV on your cell phone has been huge in Asia for years. Now it's time for mobile video to really make its mark in the U.S., as broadcasters are becoming down-right desperate for new markets to tap into.

It's All About Windows 7 - Windows Vista is functionally dead already. No one will willingly upgrade to Vista now that Windows 7 is just a year away. And when it finally arrives (some predict December 2009 for a release date... but that's speculation), expect a flood of software to be Win7-ready at launch, unlike the pathetic trickle that accompanied Vista. PC manufacturers are down-right drooling for this release to lift them out of their current, Vista-driven agony.

Green Tech Hits the Mainstream - There's a ton of "green" hardware on the market these days -- from bamboo hard drives to solar gadget chargers -- but 2009 should see a substantial focus on environmentalism across the mainstream industry, from decreasing reliance on heavy metals and hazardous chemicals to broader recycling programs.

4G Remains a Niche at Best - WiMax hasn't made much of an impact to date, and it's unlikely that will change in 2009: It's just not fast enough nor does it have a large enough footprint to merit switching carriers and/or investing in new hardware. I can't imagine the major WiMax backer, the troubled Sprint, will find funds to invest in the massive amount of infrastructure it will take to get 4G going in earnest, at least not in '09. Competing technologies have an even grimmer outlook and are certain to be no-shows until 2010 or later.

Android Becomes Competitive - The first "Google phone" was met with an emphatic and resounding sigh, but the beauty of the Android OS is that innovation keeps rolling along quite handily. I expect to see some great strides in the software and the hardware that runs it (the homely T-Mobile G1 isn't making many fans) such that by the end of 2009, Android could actually be competitive with the iPhone.

Discounts Get Silly - Black Friday wasn't the end of absurd deals on tech. I'm predicting hefty price cuts throughout the tech industry to be sustained -- or deepened -- as the year wears on and manufacturers and retailers alike attempt to jump-start their business in the hopes of getting an economic recovery started.

Microsoft talks Blu-ray support

http://www.gamespot.com/news/6187379.html

Microsoft talks Blu-ray support
CEO Steve Ballmer says the company will work with Sony's disc format "in ways that make sense."
By Brendan Sinclair, GameSpot
Posted Mar 7, 2008

Microsoft backed Toshiba's HD DVD in its losing effort against Sony's Blu-ray in the next-gen disc format wars, but it doesn't appear to be holding grudges. At the company's Mix08 Internet conference in Las Vegas yesterday, Microsoft CEO Steve Ballmer confirmed that Microsoft will be working with Blu-ray, according to a Seattle Post-Intelligencer report.

"We've already been working on, for example, in Windows, device driver support for Blu-ray drives and the like, and I think the world moves on," Ballmer said. "Toshiba has moved on. We've moved on, and we'll support Blu-ray in ways that make sense." The report doesn't mention the Xbox 360 or the hypothetical Blu-ray add-on that has been rumored of, hinted at, and reported on.

As of press time, Microsoft had not returned requests for comment on the issue in light of Ballmer's presentation. However, the company had already addressed the possibility of an Xbox 360 Blu-ray drive earlier this week, with a representative saying, "We have made no such announcement. Games are what are driving consumers to purchase game consoles, and we remain focused on providing the largest library of blockbuster games available."

Is 2008 the year of the PlayStation 3?

http://www.msnbc.msn.com/id/23172933/

Is 2008 the year of the PlayStation 3?
Console still faces uphill battle, despite Blu-ray success and upcoming titles
By Levi Buchanan
MSNBC contributor
Fri., Feb. 15, 2008

While the beleaguered PlayStation 3 still faces an uphill battle, Sony believes the console is spring-loaded for a turnaround.

Why? The success of Blu-ray, an upcoming slate of much-needed exclusive games and new numbers from the NPD Group showing that the console bested Microsoft's Xbox 360 for the first time in January.

(MSNBC is a joint Microsoft - NBC Universal venture.)

Since the system's November 2006 debut, the PlayStation 3 has consistently been humbled by the Nintendo Wii and its chief rival, the Xbox 360. But numbers released Thursday show that the PS3 outsold the Xbox 360 in last month, moving 269,000 units in the U.S. and coming in second only to the Nintendo Wii.

Jack Tretton, Sony Computer Entertainment America's CEO, was upbeat in a email sent to reporters after the release of the NPD data: “Coming off a great holiday sales season we see strong momentum behind PS3 in 2008, and feel confident about the year ahead."

So will 2008 be the breakout year for the PS3? Probably not. The changing tastes of the market are not on Sony’s side, and a twitchy economy doesn’t help the company's chances, either. Plus, one month of besting the Xbox 360 — in a month where none of the systems sold more than 300,000 units — doesn't necessarily signal a turnaround.

Colin Sebastian, an analyst with Lazard Capital Markets, sees January as an aberration due to short Xbox 360 supplies following their successful holiday season.

"There may be a substitution effect there," he says. "It says as much about Xbox 360 supply issues as it does about PS3 sales."

Blu-ray boosted PS3

But the PlayStation 3 isn’t down for the count. The immediate advantage Sony has going into 2008 is something that initially looked like a liability: its Blu-ray DVD player. It was pretty cool to have the cutting-edge player inside every game system, but it also hoisted the price of the PS3 to $600 — at least initially.

"The added cost of Blu-ray to the PS3 hurt it. Consumers didn't see it as a compelling value,” says Sebastian.

But Sony has dropped the price of the PS3 since launch. The base model, which sells for $400, makes it one of the cheapest Blu-ray players on the market.

And even though the PS3’s sales looked anemic in comparison with its competitors — even in comparison with its older sibling, the PlayStation 2 — 3.2 million units sold surely helped Blu-ray in its apparent triumph over HD-DVD.

This week, online DVD-rental site Netflix threw its weight behind the format. And last month, Warner Bros., the largest movie studio in Hollywood, announced it was going exclusively with Blu-ray.

...But high-def hasn't caught on like DVD did
Having HD-DVD on the ropes is a good thing, but high-definition movies have not caught on like DVD did back in 2000. And after several years of the iPod's stratospheric ascendance, consumers are now plenty comfortable downloading their entertainment. For a new generation, physical media is just so yesterday.

Indeed, Apple recently announced the launch of HD movie rentals via its Apple TV box, mirroring something Xbox 360 owners have been able to do for a year. And let's face it — for a large number of consumers, DVD is simply good enough.

This dovetails with another problem Sony had in 2007 — a situation that is unlikely to change this year: The PlayStation 2 was also apparently good enough for many consumers. Last year was a good one for the eight-year-old system, which outsold the PS3 by almost 1.5 million — thanks to a $129 price point and a host of great games, such as "God of War 2."

There are also thousands of PS2 games on shelves, many in the $20 range, making them not only impulse buys, but also more comfortable purchases in an economy that has many consumers minding their bank accounts.

So, where are the exclusives?

Another problem that the PS3 must conquer in 2008? Its lack of exclusive releases. Microsoft’s Xbox 360 had a great 2007, with exclusive titles such as “Halo 3” and “Mass Effect.” Sony needs to step up the number of titles for its new system, period, and the number of games that can’t be played anywhere else as well.

"Exclusive content is one of the hallmarks of the PlayStation brand," says Scott Steinberg, vice president of product marketing at Sony. "And we'll have that in 2008."

The calendar looks good so far. The announced titles on deck for 2008 are Sony's racer "Gran Turismo," the sci-fi shooters "Resistance 2" and "Killzone 2," and the inventive "LittleBigPlanet," an action game that relies on gamer-created content to flourish.

All the anticipated games look fantastic so far, but "LittleBigPlanet" has potential to be a true breakout hit if it catches on via word of mouth, not entirely unlike a Facebook or Second Life. And speaking of Second Life, Sony will also debut "Home," its 3D virtual world community for both the PS3 and the PlayStation Portable in 2008.

Will 'Metal Gear,' 'Final Fantasy' be the ticket?

The PS3 will also be supported by Konami's anticipated "Metal Gear Solid 4" and Square Enix's "Final Fantasy XIII" — as long as these games remain PS3 exclusives.

Because games now cost tens of millions of dollars to develop, and the Xbox 360 has sold almost 10 million consoles in America alone, many publishers have converted former PS3 exclusives to multiplatform games, such as Capcom's "Devil May Cry 4" and Ubisoft's "Assassin's Creed."

What’s more, these games repeatedly sell better on the Xbox 360. "Assassin's Creed" sold only 377,000 copies on the PS3 last November, compared with 980,000 on the Xbox 360.

It's all about differentiation

The PS3 was also dealt a blow when decided to make its much-anticipated “Grand Theft Auto 4” for the Xbox 360 and the PlayStation 3. What’s more, Microsoft also secured exclusive bonus content for the Xbox 360 version of the game.

To really win this console war, Sony needs to figure out a way to differentiate the titles that go multiplatform, like “Grand Theft Auto IV.”

"If these games look like Xbox 360 games or are not as fun as Wii games, that's a problem," says Sebastian.

Will Blu-Ray keep exclusives on the platform?
Sony counters that the success of Blu-ray will help keep exclusives on the PS3 and provide that needed differentiation.

"The industry is moving toward large blockbusters that only fit on Blu-ray," says Steinberg, referring to the 50GB of storage available on a Blu-ray disc. (The Xbox 360 uses regular DVDs that store only 9GB.)

Size matters, but is the market really moving toward physically bigger games? With the graphically inferior Nintendo Wii as the uncontested winner of last year’s console slugfest, the unscientific data would seem to indicate that bigger isn’t always better.

"(Sony) probably miscalculated in terms of where the market was going. Sony moved up-market," says Sebastian. "The market has moved a little bit more casual."

In an attempt to capture this casual trend, Sony has its PlayStation Network, a place where gamers can download smaller games, such as the upcoming "echochrome," a puzzle game that looks like an M.C. Escher illustration.

These games should sell to a dedicated Sony fanbase, but it's doubtful that Sony (or Microsoft, for that matter) can wrest the casual narrative away from Nintendo at this point. The only thing that could possibly nudge the needle is another price drop, which Sebastian thinks is in the works for 2008. But Microsoft could immediately neutralize that salvo with an expected (and much overdue) price drop of its own for the Xbox 360.


This is now Nintendo's game to lose, and they show no signs of relinquishing the table — especially with the anticipated release of "Super Smash Bros. Brawl" next month, a title more hyped than last year's best-selling "Super Mario Galaxy."

The contest is for second place right now. And Microsoft just has too much of a head start on Sony to make 2008 a reversal of fortune, leaving Sony again holding the bronze over a console that was supposed to deliver the gold.

DVD FORMATS

http://www.theglobeandmail.com/servlet/story/LAC.20080220.RBLURAY20/TPStory/?query=Toshiba

DVD FORMATS: HOW SONY'S BLU-RAY TRIUMPHED OVER TOSHIBA'S HD
Stringer makes his mark
Sony's CEO led his company to victory in the high-definition sweepstakes by convincing the major studios to come aboard
BARRIE MCKENNA AND MATT HARTLEY
February 20, 2008

WASHINGTON, TORONTO -- Howard Stringer made history in 2005 for being the first non-Japanese executive to take the helm at Sony Corp. But he may be better remembered as the one who won the high-definition war, erasing the stain on the electronics firm's image ever since it lost the videotape war two decades earlier.

Although celebrated yesterday, the victory was sealed last month when Sony swayed Warner Bros. to back Sony's Blu-ray technology and quit producing movies using Toshiba Corp.'s rival HD DVD format.

What remains a mystery is just how big a push Warner needed to pick sides. Analysts say Sony only prevailed following a heated bidding war against Toshiba, with the reward reaching as much as $400-million (U.S.). Neither side has confirmed the size of any bids or payments.

It was supposed to be the technology equivalent of First World War trench warfare: A prolonged battle to the death between Toshiba and Sony for global domination in high-definition DVDs.

In the end, the denouement was more like Germany's swift 1940 end run of the Maginot line.

Less than two years after its first HD DVD player hit the market, Toshiba president Atsutoshi Nishida raised the white flag, declaring yesterday that it would stop making and selling the devices altogether within a month.

Toshiba's unconditional surrender leaves the spoils to Sony, maker of the rival Blu-ray disc player - a technologically superior format that had the backing of virtually all the major movie studies and retailers.

"We simply had no chance to win," Mr. Nishida acknowledged bluntly.

The final straw, he said, was Warner's decision last month to exclusively release movies in Blu-ray. The decision by Warner, with about 20 per cent of the movie market, put a critical mass of the industry in the Blu-ray camp.

With billions of dollars in global sales at stake, experts had predicted the Toshiba-Sony battle would go on for years - not unlike the 1980s battle of videotape formats between VHS (Matsushita) and Betamax (Sony). That war lasted a decade, leaving Sony battered and humiliated.

So how did this epic battle come to such an abrupt end?

The answer lies in part with the bruising Sony experienced with Betamax, which, like Blu-ray, was also the better product on paper.

For more that 20 years, Sony has been "haunted by Betamax" and was fiercely determined not to let history repeat itself, explained Xavier Drèze, a marketing professor at the University of Pennsylvania's Wharton business school.

"Sony was much smarter," Prof. Drèze said. "They understood this time they couldn't do it alone. They understood that they needed strategic partnerships with industry players."

The war was over when Sony managed to line up a critical mass of partners - in Hollywood, Silicon Valley and on Main Street.

The tipping point was Warner Bros. But Sony Pictures, Walt Disney Co. and News Corp.'s Twentieth Century Fox Film Corp. had already done the same - signing exclusive sealed deals with presumably rich royalty arrangements.

"This was heavy hitters in a back room talking about what the royalty structure was going to be and how much money they were willing to put on the table to be exclusive with one camp or the other. That was the determining factor here," concluded Van Baker, an analyst with market research firm Gartner Inc.

Until last month, Warner had been backing both technologies.

Last Friday, Wal-Mart Stores Inc. announced it would sell only Blu-ray DVDs. Officials said "customer feedback" prompted its decision.

Netflix Inc., Best Buy Co. Inc., Blockbuster Inc. and Target Corp. had earlier done the same.

"Everyone was tired of the format war, the retailers were tired of it, the consumer electronics vendors were tired of it and they just wanted this thing to get settled," Mr. Baker said.

"Consumers and the industry learned the hard way with Beta and VHS that a prolonged format war was disastrous. There was a lot of motivation to get one or the other to win and the only thing that protracted it was the amount of money flying around."

The groundwork for Sony's stunning victory, however, came months, even years ago. Prof. Drèze said Blu-ray had several things going for it that helped it to build loyalty with consumers and the industry.

Six years ago yesterday - and years before the first Blu-ray disc or player was sold - Sony had lined up most of the other computer and electronics makers, including LG Electronics, Panasonic, Samsung, Apple and Dell.

Sony also owned a major movie studio. So it could push its own technology.

Third, the company sold Blu-ray to rival movie studios with the promise of superior digital copyright protection.

Sony also used its PlayStation video game console, which also works as a Blu-ray player, as a sort of "Trojan horse," Prof. Drèze said.

Sony has already sold 10.5 million of its PS3 consoles, compared with roughly one million HD DVD players. PlayStation buyers, he said, unwittingly embraced Blu-ray and undermined HD DVD.

Ultimately, the technology is superior. Blu-ray can hold up to three times more data (200 gigabytes versus 60) and offers higher resolution.

In the end, it could be a pyrrhic victory for Sony. The age of hard copy discs is already giving way to digital downloads, stored and played from PCs, iPods and other portable devices.

"I don't think the heyday of DVD is going to return," said Mr. Baker, the analyst. "For most consumers, digital downloads are going to be very appealing."

How Sony lost Betamax

1 QUALITY OVER

QUANTITY Despite better picture quality, Sony's original Betamax tapes could record only one hour of video, while rival VHS tapes could store double that.

2 SECRET RECIPE

Sony initially failed to license its Betamax technology to a sufficient number of manufacturers, thinking it could go it alone. This led to a situation where VHS players competed against one another for share, driving down prices and making the format more attractive to consumers.

3 BUYING V. RENTING When both systems arrived in the United States in the mid-1970s, VHS machines were less expensive to rent. When consumers began to purchase rather than rent their video players, they tended to go with VHS machines. 4PORN CONUNDRUM Sony refused to license the Betamax technology to adult film companies, who turned to VHS tapes and ended up creating a multibillion-dollar industry.

How Sony won Blu-ray

1 BIGGER IS BETTER

Sony's Blu-ray discs can store upward of 50 gigabytes of data on a single disc, while HD DVDs hold about 30 gigs.

2 PLAYSTATION 3

By including a Blu-ray drive in its next-generation video game console, Sony was able to drive sales of both the PS3 and its new DVD format.

3 SOLID PARTNERSHIPS Not wanting to duplicate the Betamax mistake, Sony took the initiative to license its Blu-ray technology with as many partners as possible. When Blu-ray was first announced in 2002, Sony had already signed up eight partner companies committed to producing players.

4 CONTENT IS KING

By signing exclusive deals with more studios and content providers than Toshiba, Sony was able to squeeze its competitor to the sidelines. Warner's defection to Blu-ray was the fatal blow.

Matt Hartley

Dead technologies

Media formats we have used, loved and discarded for the next best thing

The cassette tape

A Walkman and roller skates, anyone? Tapes were the original portable format and made music pirates of us all. (Can I tape your Fleetwood Mac Rumors?) But they were hated by record companies. The sound quality tended to go tinny after a few dozen plays, and many tapes wound up melting in a car on a sunny day.

Eight tracks

Developed by plane maker Bill Lear, eight-track tapes were large and couldn't be rewound. And because of their high tape speed, didn't sound great. Nevertheless, they were popular in the 1970s, thanks to the auto industry, which installed thousands of eight-track players. When sales slipped, companies eager to pare formats quickly dropped the eight track. Vinyl

Cumbersome to play and easily damaged, albums faded out in the late 1980s. But album covers managed to become a genuine art form and another way to grab music buyers' attention. Lately, albums have a enjoyed a comeback, thanks to collectors, club DJs and scratching (ask your kids).
Compact discs

CDs are dead? They will be soon. Who needs all those plastic cases and discs when you can fill your hard drive and iPod with thousands of songs? Using a credit card, of course. Downloading music for free is wrong, isn't it?

HD-DVD Death Made Official

http://blog.wired.com/gadgets/2008/02/hd-dvd-death-ma.html

HD-DVD Death Made Official. Downloads To Kill Blu-Ray Next.
By Rob Beschizza
February 16, 2008
Categories: High Def

Toshiba put HD-DVD out of its misery today. Reuters confirmed this afternoon that it will cease manufacturing HD-DVD equipment, following earlier reports from Japan's NHK public broadcasting network.

This leaves Blu-Ray as the presumptive victor in the irrelevant optical disk format war. It now must face up to the real competition: the continuing success of DVD and the growing popularity of downloads, both on the internet and on-demand cable TV.

The end comes only a day after Wal-Mart announced it would no longer carry HD-DVD stuff. This will go a long way to confirming the view, long-held by cynics, that the mega-retailer always held the executioner's axe to begin with, and was merely waiting until it was clear which format's camp had the most densely-stuffed brown envelopes to throw at Hollywood.

Wal-Mart dumps HD DVDs to back Blu-ray

http://news.yahoo.com/s/nm/20080215/tc_nm/walmart_dvd_dc

Wal-Mart dumps HD DVDs to back Blu-ray
By Franklin Paul
2-15-8

Wal-Mart Stores Inc (WMT.N) has decided to exclusively sell high-definition DVDs in the Blu-Ray format, dealing what could be a crippling blow to the rival HD DVD technology backed by Toshiba Corp (6502.T).

The move by the world's largest retailer, announced on Friday, caps a disappointing week for HD DVD supporters, who also saw consumer electronics chain Best Buy Co Inc (BBY.N) and online video rental company Netflix Inc (NFLX.O) defect to the Blu-ray camp.

In a statement on its Web site, Wal-Mart said that over the next few months it will phase out sales of HD DVD systems and discs. By June, it will sell only products in the Blu-ray format which was developed by Sony Corp (6758.T).

"We've listened to our customers, who are showing a clear preference toward Blu-ray products and movies with their purchases," said Gary Severson, a Wal-Mart senior vice president.

The move affects 4,000 Wal-Mart and Sam's Club stores in the United States, as well as related online sites. The stores will continue to sell traditional DVD players and movies.

The so-called format war between HD DVD and Blu-ray has been a thorn in the side of retailers, which have had to commit shelf space to devices from both camps even as they field complaints from frustrated and confused customers.

Next-generation DVDs and players, boasting better picture quality and more capacity, were expected to help revive the $24 billion global home DVD market. But Hollywood studios had initially split their alliances between the two camps, meaning only certain films would play on a consumer's DVD machine.

Like the Betamax-VHS battle in the 1980s, having two DVD standards has dampened sales of both and put retailers in a conundrum of having to either choose sides or sell products that have a chance of becoming obsolete very quickly.

The balance of power, however, tipped toward the Sony camp in January after Time Warner Inc's (TWX.N) Warner Bros studio said it would only release high-definition DVDs in Blu-ray format. With that, studios behind some three-quarters of DVDs are backing Blu-ray, although some release in both formats.

Blu-ray also has support from News Corp's (NWSa.N) 20th Century Fox, Walt Disney Co (DIS.N) and Lions Gate Entertainment Corp (LGF.N). Sony's PlayStation 3 game console can also play Blu-ray films.

"So if you bought the HD player like me, I'd retire it to the bedroom, kid's playroom, or give it to your parents to play their John Wayne standard def movies, and make space for a BD player for your awesome Hi Def experience," Wal-Mart's movie and gaming blogger, Susan Chronister, wrote in a posting.

To be sure, Toshiba has secured agreements with studios including NBC Universal's Universal Pictures, Viacom Inc's(VIAb.N) Paramount Pictures and DreamWorks Animation SKG Inc (DWA.N).

Microsoft Corp's (MSFT.O) Xbox 360 also currently works only with HD DVD. However, Microsoft said in January it could consider supporting Blu-ray technology at consumers' behest.

Toshiba could not be reached to comment on Wal-Mart's move.

Earlier on Friday, the Hollywood Reporter quoted unidentified industry sources as saying Toshiba was widely expected to pull the plug on HD DVD in the coming weeks.

Toshiba spokeswoman Junko Furuta said none of what was reported in the magazine had been decided. She declined to comment further, saying: "We cannot comment on speculation."

(Reporting by Franklin Paul; additional reporting by Kiyoshi Takenaka in Tokyo; editing by Phil Berlowitz and Gerald E. McCormick)

Porn Providers Rethinking Next-Gen DVD Plans

Robalini's Note: Who would've guess the battle for for DVD standards would turn on "Jenna Haze Oil Orgy"?

http://www.pcmag.com/article2/0,2704,2247595,00.asp

Porn Providers Rethinking Next-Gen DVD Plans
01.10.08
by Chloe Albanesius

LAS VEGAS—The adult film industry is still taking a wait-and-see approach to the Blu-ray /HD DVD wars. But while Blu-ray's perceived costs have pushed some companies into the arms of the HD DVD camp, Warner Bros.' decision last week to exclusively support Blu-ray has some thinking that the end of HD DVD is nigh.

Executives in the adult-film industry spoke Wednesday during the opening day of the AVN Adult Entertainment Expo 2008, which briefly overlaps with the more mainstream Consumer Electronics Show ending Thursday.

"It could be a real sign that things will shift," Jeff Thill, director of video operations for the Hustler Video Group, said about the Warner decision. Thill said he sees no advantage of one format over the other, but is "leaning Blu-Ray" after Warner's announcement.

The Blu-ray camp, led by Sony, has been fighting Toshiba and its HD DVD format for years in a battle reminiscent of the VHS versus Betamax battle. In that fight, Betamax maker Sony's refusal to work with the porn industry helped usher in a VHS victory when the adult industry capitalized on the burgeoning popularity of VCRs and video rentals.

Hustler had some success recently with the Blu-ray release of Jenna Haze Oil Orgy, said Thill, who was on hand to showcase Hustler's latest releases at the annual AVN Adult Entertainment Expo.

The company packaged the "Jenna" disc with an HD DVD and standard version in case users had trouble with Blu-ray, but has thus far not received any complaints. In March, Hustler will release its latest "Barely Legal" DVD in the Blu-ray format, he said.

Hustler has released two titles using the HD DVD format, Thill said. The company expects to release between 15 to 25 high-definition videos in 2008, most of which will probably be Blu-ray, Thill said.

Blu-ray is "a little bit of a headache" because of royalty fees, but it's "six of one, a half dozen of the other" with the format wars, he said. Blu-Ray also "sounds sexier," according to Thill, and there's "an important base in the gaming world" because the popular PlayStation 3 runs Blu-Ray while Microsoft has released an optional HD DVD drive for its Xbox 360 console, Thill said.

Vivid Entertainment, home to porn star Jenna Jameson, has also released videos on Blu-ray and HD, said David Peskin, Vivid's national sales manager. It currently has two Blu-ray titles and three HD DVD titles on the shelves.

Vivid was initially "conservative" with its high-definition re-order numbers, but is "starting to stock a little heavier" since sales have been promising, Peskin said. Vivid has seen Blu-ray sell more units online while HD does better in retail stores, he said.

The company doesn't yet have a format preference. "Both have surpassed expectations," he said, though Peskin also pointed to the PlayStation 3 connection as a plus for Blu-ray.

Some companies have had to bypass Blu-ray altogether. Jackie Ramos, vice president of DVD production for Wicked Pictures, "looked to Blu-ray" when the company was first exploring high-definition about a year ago, but had trouble finding a provider that would produce Blu-ray discs for the adult industry.

Wicked has since released about a half dozen HD DVD titles, but Ramos managed to track down some porn-friendly Blu-ray producers and is now "aggressively" looking at those options.

With the Warner decision, things are "a little more serious," Ramos said, and, to him, it makes sense to examine Blu-Ray should it become the industry standard.

Ramos also had concerns about the Blu-ray price point. There's a copyright aspect you can't get around with Blu-Ray, whereas HD DVD allows you to choose whether or not you want that copyright protection, he said. "With adult industry, HD DVD was friendlier price wise."

Ramos expects to select a Blu-ray producer in the next few weeks and hopes to release Wicked's first Blu-ray title in the next few months, he said. But he was not convinced that the porn industry was driving the debate as it did with VHS and Betamax.

"What really drives it is the availability of players" and what the consumers want, Ramos said. HD capitalized on that by selling cheaper players, but now that many of the major studios have jumped on the Blu-Ray bandwagon, "we'll have to see," Ramos said.

Albert Lazarito, vice president of Silver Sinema, also believes the consumer is key to winning the DVD battle. "With the Warner Brothers decision, the market will direct the outcome," he said. Lazarito is "more than confident that it won't be the adult realm" that selects a final DVD format.

Silver Sinema has been filming in HD because Blu-ray is too expensive, Lazarito said, but his company is "ready to go depending on how the market shifts."

Pink Visual was also turned off by the cost of Blu-ray, explained director of marketing Kim Kysar. "HD DVD was affordable; it was doable. Blu-ray was too expensive," she said.

Pink Visual will release its first HD-DVD video next week.

"Everybody's going to want to have both options," Kysar said. "Blu-Ray could be the next step, but not if nobody uses it and it stays too cost prohibitive."

Kysar also expressed concern about how much the camera would capture in high-definition, a sentiment echoed by Lazarito.

"Imperfections are modified," Lazarito said.

Paramount in HD-DVD blow

http://www.ft.com/cms/s/0/ea637496-bd8d-11dc-b7e6-0000779fd2ac.html

Paramount in HD-DVD blow
By Matthew Garrahan and Mariko Sanchanta in Las Vegas
Published: January 8 2008

Paramount is poised to drop its support of HD-DVD following Warner Brothers' recent backing of Sony's Blu-ray technology, in a move that could sound the death knell of HD-DVD and bring the home entertainment format war to a definitive end.

Paramount and DreamWorks Animation, which makes the Shrek films, came out in support of HD-DVD last summer, joining General Electric's Universal Studios as the main backers of the Toshiba format.

However, Paramount, which is owned by Viacom, is understood to have a clause in its contract with the HD-DVD camp that would allow it to switch sides in the event of Warner backing Blu-ray, according to people familiar with the situation.

Paramount is set to have a bumper 2008 with several likely blockbusters, including the latest instalment in the Indiana Jones franchise, slated for release.

Paramount joining the Blu-ray camp would leave HD-DVD likely to suffer the same fate as Sony's now obsolete Betamax video technology, which lost out to VHS in a similar format war in the 1980s.

Warner's decision last week to throw its weight behind Blu-ray saw it join Walt Disney, 20th Century Fox and Metro-Goldwyn-Mayer as backers of the Sony format.

The Warner move gives Blu-ray about 70 per cent of Hollywood's output, although the format's grip on film content will increase further when Paramount comes aboard.

It is unclear whether DreamWorks Animation has the same get-out clause in its contract with the HD-DVD camp. However, Paramount and DreamWorks have a close relationship, with Paramount distributing DreamWorks Animation films.

The two companies also signed their HD-DVD contracts at the same time.

Meanwhile, Universal has declined to comment on its next- generation DVD plans following the Warner move.

Sir Howard Stringer, chief executive of Sony, yesterday held out an olive branch to its rival in the next-generation DVD format wars following Warner's decision to back Blu-ray.

Sir Howard said the company would be "open to dialogue" with the rival high-definition HD-DVD camp to "grow the market". The move came as new figures showed that Blu-ray had opened up a decisive lead over the rival home entertainment format.

Sir Howard said: "We are not going to push people around. We'll talk to anyone . . . we have a lot of work to do to grow the market. We'll be systematic and open to dialogue at all times."

He added that Sony still had "a lot of work" to do to get Blu-ray "widely accepted" among American consumers.

Sony Blinks, Drops Price Of PlayStation 3

http://www.mtv.com/news/articles/1564256/20070709/index.jhtml

Jul 9 2007
Sony Blinks, Drops Price Of PlayStation 3 In North America
Also announced: a new version of the console that will include an 80-gigabyte hard drive.
By Stephen Totilo

Sony appears to have blinked first in the current video game console war.

The company that dominated the battle among the PlayStation 2, Xbox and GameCube announced Monday (July 9) that its current model of the eight-month-old PlayStation 3 will drop in price from $599 to $499 in North America, effective immediately. Neither Microsoft's Xbox 360 nor Nintendo's Wii have dropped in price since the systems' respective launches in November 2005 and November 2006.

Sony also announced plans for the August introduction of a new version of the PS3 that will include an 80-gigabyte hard drive — 20 GB more than the current model — and a copy of the early 2007 racing game "MotorStorm." The new model will retail for $599.

The PlayStation 3 has been the third-place console in 2007 month-to-month sales, according to NPD, a research group that tracks sales in the U.S. Dave Karraker, head spokesperson for Sony's American PlayStation division, told MTV News that part of the reason to lower the price on the 60 GB model was to get the system in more hands. "We need to increase our installed base," he said. "That's no secret to anybody."

Sony Computer Entertainment of America President/CEO Jack Tretton cited falling component costs as an added factor. "Since the introduction of the original PlayStation 3 60 gigabyte model back in November of last year, the company has been able to reach some tremendous production milestones and ultimately has been able to reduce the cost of the PlayStation 3," he said in a statement. "We want to pass those cost savings on to consumers, and as a result, we have been able to lower the price."

When the PS3 price was first announced in May 2006, Sony officials explained that the console's cutting-edge Blu-ray disc player, which plays high-definition movies, was a significant factor in the console's unusually high price. Coupled with this announcement, Karraker pointed out that Sony's standalone Blu-ray players recently dropped in price by $100, a sign of falling Blu-ray component prices.

In April, Sony streamlined its PS3 line by eliminating a $499 20 GB model that lacked built-in WiFi. Why would Sony return to having two versions of the PS3? "The thinking is we would be offering this as part of the expanded effort for downloadable content and in preparation for the extended download store that's coming," said Karraker. He said the upcoming store will give PS3 owners the ability to download TV shows and high-definition movies. The added storage will also make more room for some of the bigger downloadable PS3 games, such as this fall's "Warhawk," which Karrarker said would be about 1 GB.

Aside from the increased storage and bundled game, the 80 GB version will be identical to the 60 GB one, and will not be in a different color or receive a specialized name. That's a different strategy than the one used by Microsoft. This spring, the Xbox 360 maker added to its line of $299 and $399 Xbox 360s a $479 120 GB Xbox 360 Elite, painted black to set it apart from the other model's white finish (see "Xbox 360 Is Back In Black With Roomier Elite Console").

Console comparisons are rarely apple-to-apple comparisons. As it stands now, the Elite will offer twice the storage as the newly price-cut 60 GB PS3, but only Sony's machine has built-in WiFi and the ability to play back high-definition movies on disc (the Elite can store and play high-def movies rented from Microsoft's Xbox Live download store). Naturally the other big difference is the competing lineup of exclusive games. Those rosters will be brought to the fore this week as Microsoft and Sony showcase their lineups at the Electronics Entertainment Expo in Santa Monica, California.

The current top-selling console in America is the Nintendo Wii, which has benefited from positive reception of its unusual motion-based gameplay and its lower price. The Wii has outsold the 360 and PS3 every month this year. For example, in May — the most recent month for which NPD sales are available — the $249 Wii sold 338,000 units to the 360's 155,000 and PS3's 81,000. (The $129 PS2 sold 187,000.) The cheaper the console, the bigger sales might be. So given the falling component costs cited by Sony reps, would the company consider bringing back the 20 GB model for a lower cost, possibly $399, to make a run at Nintendo? Not quite. "I think the 20 gigabyte [version] is gone and gone for good at this point," Karraker said.

What isn't being ruled out is a continued evolution of the PS3 and more new models to come. The 80 GB version may not be the last new PS3. "We'll see how the waters churn on it," Karraker said. "If people want more hard-drive space or want something else, we'll address that and keep moving. That's no different with a car model and adding new pieces and parts that people are looking for."

He added: "If you look at what we're really focused on right now, it's increasing our installed base and creating that great content for those games. Whatever we need to do to make that happen is what we're going to do."