Sabotaging the Sony Playstation 3 market?

Consumer to pay more amid new digital format

By Sonny Bunch (Contact) | Friday, December 12, 2008

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On the Edge Column

I needed a Blu-ray player, and the PS3 is, without question, the best value for the money in the marketplace. It plays Blu-rays, upconverts standard-definition DVDs to near 1080 quality - and is a top-of-the-line video-game system to boot. Add to this wireless Internet capability and an ability to upgrade the operating system, and it's the Blu-ray system par excellence.

Over the past few months, I have grown to love my PS3. The image it puts out is, frankly, stunning: Combining it with a 1080p HDTV is the closest thing you're going to find to film for your home theater short of building a projector into the wall behind your couch. That is why I'm so depressed that Sony seems bound and determined to do everything in its power to hinder the market penetration of the system in particular and Blu-ray in general.

One brief example: Look at the holiday landscape. We're dealing with the worst economy since the Carter years. Deflation looms. Businesses desperately need a big holiday push to boost the bottom line. The Nintendo Wii remains the most popular system in the land, and, at $250, isn't necessarily a budget buster. XBox 360 has made serious inroads by dropping the price of its core system to $199. So how did Sony respond?

By releasing a new version of the PS3 ... that's $100 more expensive. Yes, it comes with a game, and yes, it has more hard-drive space, to which I respond: Who cares? Was the marketplace clamoring for more memory from the PS3? Is that why its market penetration is so low compared to its predecessors and competition? What were the Sony execs thinking?

Now consider the following facts: Samsung has just released a Blu-ray player that will stream Netflix movies. (In other words, you can pick a select number of movies from the Netflix library and watch them instantly on your TV.) The XBox 360 has just added the same capability. How does Sony respond? By allowing PS3 owners to stream Netflix movies? No, that would make too much sense. Instead, Sony said Netflix couldn't stream any title from Sony's library to the XBox. That'll show 'em!

Sony also has done a terrible job of marketing Blu-ray players as a whole. Consumers don't seem to understand the benefit Blu-ray offers to owners of large standard-definition (SD) DVD collections. I have had conversations with reasonably tech-savvy people who didn't realize Blu-ray would upconvert the image of an SD-DVD to near-HD quality. One consumer admitted to me that he bought an HD-DVD player after the HD-DVD/Blu-ray format war was decided earlier this year because he "wanted something that would play my old DVDs" going forward.

Consumer ignorance is a death sentence in this struggle.

I understand, in theory, why Blu-ray manufacturers and the studios want to keep it on the hush hush that Blu-ray players make SD-DVDs look better; there's an awful lot of money to be made in suckering people into buying that back catalog of titles all over again in yet another new format. However, it's a losing strategy in the long run because consumers simply aren't that impressed by the difference in picture quality.

Sony and the rest of the Blu-ray manufacturers need to implement a radical shift in their marketing strategy: Hammer home the fact that not only will their new Blu-ray player play high-definition movies, it also will vastly improve the picture quality of their previously purchased libraries.

Without such a shift, the format might perish. Market penetration remains low, and every month people don't buy a Blu-ray player is a month they get closer to downloadable HD movies and the death of the format as a whole. Sony would be wise to step it up and do a better job at getting Blu-ray players into people's homes.

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