Why Toshiba quit

teamerickson

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Jan 20, 2006
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Why Toshiba quit - Media Wonk - Blog on ContentAgenda.com - 1500000150

In the end, I think Sony just wanted it more. Having tied its two most important strategic initiatives together--like a kid tying his own shoelaces together--by insisting on a Blu-ray drive in every PlayStation 3 console, failure by Blu-ray wasn't just not an option for Sony, it wasn't even worth contemplating because it would have sunk the company. Had Blu-ray lost out to HD DVD in the high-def movie market it would have left PS3 marooned with a drive format that was obsolete for movies and unnecessary and expensive for games, not to mention unwanted by most gamers and third-party game developers. Instead of "merely" another format loss in consumer electronics, it would have crippled a PlayStation division that, as recently as three years ago, generated 70% of Sony's total profits.

In fact, given the damage Blu-ray has already inflicted on PS3 (third place in a three horse field) it's not clear that winning the format war over HD DVD will be enough at this point to salvage the whole Catdog strategy. At a minimum, Sony has blown the chance to achieve the sort of dominant market share it had in previous generation of game consoles.

But what must have been clear to Toshiba--if not at the beginning then in the end--is that the stakes for Sony were such that there really wasn't any cost it wouldn't pay to win the high-def DVD format war. There's nothing Toshiba or its allies could have done to make fighting on too costly for Sony. Ordinary competitive considerations simply didn't apply.

In contrast with Sony, losing the high-def format war, while bitter, hardly poses an existential threat to Toshiba. Though it has a large footprint in consumer electronics, most of its profits come from its semi-conductor business. It also has a substantial business in making turbines for nuclear power plants. Although Toshiba will now have to take a significant restructuring charge, the Financial Times estimates that cutting its losses now will add 40-50 billion yen to operating profits next year ($370-$450 million), which is why it shares jumped 5% on news that it was pulling out.

In the end, Toshiba didn't have to win and Sony did.
 
Good points. Sony was NOT going to have another Beta, and when Paramount and Universal went HD-DVD only, they went to the mattress and for the kill - and did it. The funny thing is that had Paramount and Universal gone dual format, it actually may have been better for HD-DVD.

Go figure!
 
"In the end, Toshiba didn't have to win and Sony did."

This is true, but only part. Read Toshiba's statement carefully about partners, projects etc. I'll play "Scott" (for those pub members that endured his hints), there is more going on than people realize. Someone actually mentioned it in another thread.

S~
 
Really? Which one? I have a tshirt from my radio station for the first person who points it out to me! Be caller number nine at...... :)
 

Clearly you failed to mention that Sony is doing great in sales...they are making up for the losses.
http://www.satelliteguys.us/video-g...sults-ps3-exceeds-360-almost-catches-wii.html
Toshiba got face+palm.
Everyone is blaming Sony, why blame? They aren't the ones that lost, Its Toshiba, and Toshiba could have won this war if they sticked an HD-DVD player in every single 360. But we can blame Microsoft for that.

Good try Toshiba fan boy (Paul Sweeting)
 
Toshiba has been raking it in with the DVD media and just did not want to lose that resource cow. Sony on the other hand has been taking the low road ever since they lost the VHS/BETA wars. Sony has been successful with alot of product lines and the Playstation platform has been one of them

Let me remind those here that when Sony put a DVD drive in every PS2 they were slamed for doing so. It was said then that putting a DVD drive in the PS2 was going to drive up the price of the product and that it was not needed for games at the time as CD was just fine. The PS2 was my first DVD drive. Sony made alot of money on that product.

Now Sony has put a BD drive in the PS3. Same arguements, going to get the same results. Once again, the PS3 is my first BD player. Sony is going to make alot of money on that too.
But here is where the new wrinkle is.

When HDM on disc first came about the majority of studios and CE manufacturers wanted something differant then DVD. Sony and others took the Blu Laser and put forth the first BD player for market consumtion. It was Toshiba who wanted to keep their DVD cash cow and decided to go in a differant direction. We know all the history, Toshiba in an effort to keep HD-DVD afloat not only dropped prices on their players to the point not only could they not make money but nobody else including the retailers could either, killed their own product.

HD-DVD fans want to blame Sony but the real blame does lay with the HD-DVD fans who would not buy the product until it was so cheap nobody could make any money on it. That was okay for HD-DVD fans who did not care if Toshiba or anybody associated with HD-DVD made money as long as they did not have to pay.

Well, now we know don't we. Toshiba lost hundreds of millions of dollars and has decided the farce cannot continue any longer. The pretender who bucked everybody else because they did not want to give up their cash cow now will be coming to the market with a BD player themselves. And you know what the real irony is -- not only did their stock go up today in every stockmarket around the world after their announcement that they were dropping HD-DVD -- but they will actually make money on the BD player they will be bringing to the market -- something they could not do with their HD-DVD players.

In the end, the blame rests solely at Toshiba's feet. They decided to go a road nobody else wanted to travel and end the end they left alot of hurt fans at the roadside. Fans who liked the cheap ride and did not want to pay for the gas.

There is alot of blame to go around for the failure of HD-DVD but the blame is not Sony's. Every decission they were massacred in the media for when the PS3 first hit the stores has turned out to be the right decission for Sony, for BluRay and for their fans.
 
Sony on the other hand has been taking the low road ever since they lost the VHS/BETA wars.
Are you nuts? They've been trying to force their proprietary formats down peoples throats continuously since then.

Mini-Disc
Memory Stick
Video8
Hi8
ATRAC
SDDS

This just happens to be their first win. And, it's mostly because of its partnership with manufacturers and studios. They came out of the gate with Matsushita and Disney backing, amongst others. That was almost enough to win right there. If it wasn't for HD-DVD's lower prices, this "war" would have been over long ago.
 
Clearly you failed to mention that Sony is doing great in sales...they are making up for the losses.
http://www.satelliteguys.us/video-g...sults-ps3-exceeds-360-almost-catches-wii.html
Toshiba got face+palm.
Everyone is blaming Sony, why blame? They aren't the ones that lost, Its Toshiba, and Toshiba could have won this war if they sticked an HD-DVD player in every single 360. But we can blame Microsoft for that.

Good try Toshiba fan boy (Paul Sweeting)

Sales are good, but they still aren't making any money off the PS3. It is still costing them $400 to manufacture.

PS3 production costs cut by half - PS3 Fanboy

Microsoft wasn't as invested in HD DVD as Sony is to Blu Ray. Sure, then wrote some software, but for them, it was more important to get the 360 out and selling units ahead of Sony. To have HD DVD integrated would have had them losing time and money. It took a year for them to release the external drive, and even then it was $200. That year headstart helped them get the huge lead they have now. I won't be surprised if the PS3 continues to outsell the 360 considering there are already almost 10 Million sold in the US alone.
 
Sales are good, but they still aren't making any money off the PS3. It is still costing them $400 to manufacture.

PS3 production costs cut by half - PS3 Fanboy

Microsoft wasn't as invested in HD DVD as Sony is to Blu Ray. Sure, then wrote some software, but for them, it was more important to get the 360 out and selling units ahead of Sony. To have HD DVD integrated would have had them losing time and money. It took a year for them to release the external drive, and even then it was $200. That year headstart helped them get the huge lead they have now. I won't be surprised if the PS3 continues to outsell the 360 considering there are already almost 10 Million sold in the US alone.

Blu-ray now will have a huge impact now against the 360.
Sony will catch up in a year or two with Microsoft.
 
Blu-ray now will have a huge impact now against the 360.
Sony will catch up in a year or two with Microsoft.

Blu-Ray will have an impact in that it makes the console a more compelling purchase, this is true.

It's very telling though that the more expensive 360 console (pro) is the hot seller, while the cheapest clearly not gaming-based console bundled with a movie, is the hot PS3 console. I'd suspect those much debated 'use the PS3 as a BD player' figures are tipping more and more towards the 'only for Blu-Ray' much to game publisher's discontent. The UK figures for DMC4 showed this, we'll see what it looks like in the US since they've been having such improved console numbers, no?
 
Are you nuts? They've been trying to force their proprietary formats down peoples throats continuously since then.

Mini-Disc
Memory Stick
Video8
Hi8
ATRAC
SDDS

This just happens to be their first win. And, it's mostly because of its partnership with manufacturers and studios. They came out of the gate with Matsushita and Disney backing, amongst others. That was almost enough to win right there. If it wasn't for HD-DVD's lower prices, this "war" would have been over long ago.

To me that IS the low road. Sony has been looking for another revenue stream for years. Now with BD it looks as though they have found one. I only hope the other members of the BDA can keep Sony from screwing things up.
 
Blu-Ray will have an impact in that it makes the console a more compelling purchase, this is true.

It's very telling though that the more expensive 360 console (pro) is the hot seller, while the cheapest clearly not gaming-based console bundled with a movie, is the hot PS3 console. I'd suspect those much debated 'use the PS3 as a BD player' figures are tipping more and more towards the 'only for Blu-Ray' much to game publisher's discontent. The UK figures for DMC4 showed this, we'll see what it looks like in the US since they've been having such improved console numbers, no?

I wonder if the improved sales of the PS3 is because it is pretty much future proof where BD is concerned. The PS3 will pretty much be able to be upgraded by firmware to do whatever BD needs to do in the future. Until 2.0 players get under $300 I suspect that most of those PS3 sales are going towards movie viewing only.
 
I still have a hard time to believe that MS will license Java again. But...
How MS is going to come in second - The INQUIRER
Can you write a game that does just one thing - plays BD discs?
Microsoft just published the 360's SDK, it must be doable. They probably still have to sign the final code...

Diogen.

With MS you never know, I love watching the soap opera they put on every week. Bid for Yahoo, Bid for Epic, it is great entertainment. :D

I hope they step on Suns toes again, I know they will be sued but it will be very entertaining to watch :up
 
I wonder if the improved sales of the PS3 is because it is pretty much future proof where BD is concerned. The PS3 will pretty much be able to be upgraded by firmware to do whatever BD needs to do in the future. Until 2.0 players get under $300 I suspect that most of those PS3 sales are going towards movie viewing only.

I somewhat agree, since I won't be a complete 360 fanboy and say that sales as a video game console are stagnant, it certainly has momentum. As a future PS3 owner, I am disappointed with what it has to offer currently as a gaming machine 15 months after release. The BD stuff puts it in a better position hardware wise, but in a pickle publisher-wise, since the result is poor game sales.
 

Paramount Goes Blu-ray

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