Microsoft wants HD-DVD to fail?
by Christopher Grant 
{ Feb 17th 2006 at 11:30AM }
Ross Rubin, an analyst with NPD Techworld, has an interesting theory in his latest
weekly Engadget column. It goes something like this: Microsoft's adoption of HD-DVD was intended to increase the
viability of the less-popular format and, in turn, be a foil to Sony's Blu-ray format. The goal was never to emerge
victorious but to weaken Blu-ray, muddying the possibility of any dominant next-gen optical format. Why? Rubin's
fictional "Disc Bloat" informant spills his guts:"Simple. Microsoft really has nothing to gain from either format winning. Just listen to any of Gates' recent interviews and how he talks about discs as a necessary evil until the world is ready for media-free distribution. That said, Microsoft has much to gain from both formats losing. Think back to the format war between DVD-Audio and SACD. Both formats lost and it was a computer company that stepped in to become the new center of the digital music universe."
Like Apple's dominance in digital music, Microsoft wants to sell you things like portable media centers running their software, or Xbox 360s with HD movies-on-demand capability. In his recent Engadget interview Gates said, "In terms of movies, I often say that this is the last format battle there will ever be, because everything is going to go online -- you're going to download it."
Until the great format battle of 2008 when competing holographic storage manufacturers vie for interplanetary dominance.
Reader Comments (Page 1 of 1)
Chris @ Feb 17th 2006 11:49AM
Then why would MS make a HD Player for the 360?
this makes no sense when you look at ALL the facts and not pick 'n' mix what fits.
mike @ Feb 17th 2006 11:51AM
Wern't disc supposed to be cheaper to produce than cartridge, however video games are selling for $60 instead of going down in price. And we all know if it does come down to all media download, it should be cheaper but they will raise the price $10 more for no other reason but the fact they can!!
jc @ Feb 17th 2006 11:53AM
I don't buy it, sure MS would want to cut out the middle man, but I just don't see it as a feasable option... right now anyways.
For example, last night I bought the X360 (yay me) and thought I would download a demo game (PGR 1.2G). It is taking forever. While I could easily download it on my PC in under an hour, it is taking almost12 hrs on XBLM.
Leaving my X360 on while I am not here is not going to happen... leaving it on for a week while I download 25G is insane... I could drive to Seattle and back from the east cost faster than that.
Come on blu-ray for the x360.
Captain Obvious @ Feb 17th 2006 12:01PM
Digital distribution will happen regardless of Microsoft. It happened to music. It's happening with games. It'll happen with video.
Those that will least benefit are the brick and morter stores the carry the items. Cut out the middle man, watch your profits increase. Blame the internet.
DJ @ Feb 17th 2006 12:01PM
It's obviously your connection that is slow when downloading on the 360. I've downloaded lots of things, including demo's that are around 650-700 mb's. They finished in under 20-30 minutes.
C. Grant @ Feb 17th 2006 12:06PM
Chris: "Then why would MS make a HD Player for the 360?"
Same reason they're supporting the HD-DVD standard in the first place. I don't think anyone has any illusions how successful the HD-DVD addon is going to be. It's a simple response to a key PS3 selling point. A better response? Downloadable HD movies. Or so the theory goes.
BS Police @ Feb 17th 2006 12:06PM
Someone please tell Bill that I DON"T want to download a 20G HD movie just to watch it once. Thanks!
gizmondo_hater @ Feb 17th 2006 12:11PM
this just shows why microsoft are so unreliable. they can't stick with a format and support it, they want to use other companies and leave them in the dust, while their predictions emerge true.
i know companies are meant to compete but i can't stand microsoft's attitudes, the chances are blu-ray will win because of the quantities of support they have, microsoft know they will lose but carry on to try and compete with blu-ray as much as they can and bring both formats down. as evil as they are!!!!!!!!!!
can't they just stick with blu-ray and for once support someone, they already have the money. it just makes me soooooo mad!!!! microsoft make me sick.
Me @ Feb 17th 2006 12:12PM
I was going to say the samething to jc it took me like 30 min to download PGR demo remember dial up doesn't count!
bazald @ Feb 17th 2006 12:14PM
#2, Mike - Cheaper to produce does not mean cheaper to buy. Increased development costs plus profit motive keep prices high.
Adam @ Feb 17th 2006 12:15PM
the end of the format war begins here ->
http://smh.com.au/articles/2006/02/17/1140064233856.html?from=rss
The1 @ Feb 17th 2006 12:23PM
We are not in Japan where BORADBAND connections are above 10MBS upload and even more for download. I am so amazed by all the BS people say about MS.
edgore @ Feb 17th 2006 12:24PM
"Think back to the format war between DVD-Audio and SACD. Both formats lost and it was a computer company that stepped in to become the new center of the digital music universe."
Um...DVD-Audio and SACD are both formats that are significantly superior to CD - better range, more channels, etc. Apple uses a modifed MP2 format that is not very noticably inferior to CDs, to most people, but 1/12th the size.
I'm not sure I buy the comparison to between visual and audio formats like this. While most people are fine with MP3s and the quality hit you take, I am not as sure that people will be willing to take the quality hit on both sound and video that will be needed over the next couple of years to deliver really good HD over internet. Heck, most HD over cable looks crappy compared to less compressed stuff like you will be seeing on Blu-Ray and HD-DVD
soupbun @ Feb 17th 2006 12:25PM
don't we do a rudimentary version of this already with digital cable tv services and DVR? Granted it's not exactly like what Gates is describing, but we already started heading down this route a while ago. I'm not particularly a Gates fan, but I think he's right about this one. You can hate his company for "doing" this to companies, but it's hard to deny there's some logic to his statement. I agree with the "blame the internet for this" statement. Although I'm also sure there will be another middle man of sorts in the new business model. There always was, and there always will be.
32_Footsteps @ Feb 17th 2006 12:28PM
If this is true, I see all the logic behind it.
Microsoft wants to rule the media market. They're currently gambling that 100% digital media will be the way to go in the future (though I personally think holographic media has much more potential, myself). As such, they want physical media to fail, and to ultimately triumph over companies that focus on physical media, like Sony does.
If Microsoft does nothing, then there is a greater chance that Blu-Ray will become ascendant, hampering their future in digital distribution. By supporting HD-DVD, however, they stand a greater chance of causing a format war with physical media, weakening their competitor.
The ultimate idea is that Microsoft would willingly give up a few billion right now to make even more later on. Strange? Heck, it's the company's modus operandi.
bubbacrosbysucks @ Feb 17th 2006 12:31PM
funny, i was expecting longhorn (and following apps such as media player, office) to be web based... not yet i guess
SuicideNInja @ Feb 17th 2006 12:33PM
Don't say that, I just bought Toshiba stock! LOL Actually, that was because they bought the company I work for.
Although Bluray seems to have support, it seems their DRM and featureset are dragging it down. HD-DVD is already getting good reviews, and they have a familiar name going for them.
Personally, I think we'll end up with better flash memory for large amounts of storage. They can already cram a lot in a small space. Connection speeds just aren't high enough for full-on digital media transfer. We have to fully get past copper lines first.
The holographic discs will have enough difference in storage to merit changes though.
Thomas Crymes @ Feb 17th 2006 12:38PM
People are playing the victim again.
The only reason game prices are as high is because we will pay that much for a game. If everyone would only pay $20 for a game, then that is how much games will be.
The caveat is that if the companies don't feel they can produce an "A" game for the end sell price of $20, they won't, and we will be stuck with "B" or "C" level games. That is where competition comes in, because if one company can make an "A" level game and sell it for $20 then all companies would be forced to compete with them.
We know the actual manufacturing cost of a game is extremely low. What we don't know is how much a game costs to be developed, how much Sony, Microsoft, Nintendo are charging as a license fee per title (actually I think that might be around $20-$25), and any other licensing if it is based on an existing intellectual property.
Actually, a lot of the video game companies are publicly held, and I remember more than a couple of them (even EA) struggling financially at some point, so they are clearly not raking in buckets of extra cash.
I'm not saying that prices couldn't be lower, and I'm not defending the vid game publishers. I'm merely saying I don't know anything more than that they are charging what people are willing to pay, and they should charge as much as they can, because last time I checked video games were not food, and therefore should not be price fixed. They charge as much as they can, and we pay out as little as we can. In the middle is something called capitalism.
bubbacrosbysucks @ Feb 17th 2006 12:42PM
@#13
you're completely right. its a collection based mindset for music and compressed video formats. a way for them to prove status by having as much as possible (and most of it is lame anyways). The only reason why people buy ipods are because their ipods -not caluse they like apple, not cause they comparison shopped the Creatives, not to 'finally' store all 10,000 songs they BOUGHT.
With games, the next/now-current gen systems and the generation after that still won't have the harddrive capacity to contain more than a few of the games we buy... unless it's a web-app sort of dealy. Vista it ain't.
so- low quality feel-good crap= ipod craze
good quality portable gaming= nintendo craze approaching
Thomas Crymes @ Feb 17th 2006 12:43PM
I do have a question about HD-DVD and the XBox 360. If all HD-DVD and Blueray players will need to use HDCP for protection, how will an add-on HD-DVD work for the XBox 360? There is no HDMI port on the 360 and I don't see how they can impose protection unless the HD-DVD add-on has its own video out, which seems silly.
I wonder.
lunatech @ Feb 17th 2006 12:45PM
Whether you like it or not, economy will drive Digital distribution over conventional media.
The overhead of licensing/branding in boxes, retail mark-up, and production time will eventually be obsolete.
You people think too much in the box. Regardless of whether you like waiting for a 8gig download, it's faster and more economically feasable for a developer to have the download available and skipping all of the overhead of printing, distribution, and licensing costs.
Bandwidth will increase, so will storage memory...so will developers using this outlet because it's just WAY cheaper. The retail outlet won't disappear right away, there will always be people willing to buy the physical media until digital delivery has evolved more.
Xbox Live Arcade is a good example of this.
It won't be long for premium titles to be available through this method, -- and it will get to us with more added benefits at both ends (developer/consumer).
e dubs @ Feb 17th 2006 12:46PM
Mr. Crymes, that was the smartest thing I have ever read on this blog.
Word to your entire post.
DG @ Feb 17th 2006 12:53PM
Absolutely, digital distribution is the future. Remember when all of our streets were ripped up in the mid-90s to pleace old cable wires with fiber optic wires? This is just a continuation of that. Media manufacturers would love to be in complete control of distributing their content, and I'm positive they would love it -- just like Microsoft -- if both Blu-Ray and HD-DVD fail.
Imagine if Sony or MGM or BMG can completely cut out used media sales. Imagine not being able to buy any old Nirvana music for $3, but having to pay $11.99 every single time. Imagine deeply discounted box sets of DVDs disappearing forever. If Sony, MGM, et al. can stop making a plastic product with logos and images and sell the content and content only, they would certainly jump at the chance.
The future will be convienent, I'm sure. It will also be very expensive.
HighDef Edition @ Feb 17th 2006 12:55PM
Re: BS Police,
If I go to Yahoo-Music right now I can watch music videos via a 'stream'. All we need is a bigger 'pipe-line' aka download speeds and we're in business baby.
I am done buying DVDs or HD-DVDs / Blu-Rays. It's all about the content.
I pay under $80.00 per mth to see HBO-HD, Starz-HD, ABC-HD, CBS-HD, NBC-HD, FOX-HD, WB-HD, UPN-HD, IN-HD / IN-HD2, TNT-HD, ESPN-HD, Universal-HD, PBS-HD via Comcast in Florida. Between HBO-HD & Starz-HD I have tons of movies to choose from.
I would deff pay a bit more to watch Music Videos in HD via my Xbox-360 and some PPV-HD Movies as well.
Ptaaty @ Feb 17th 2006 12:56PM
#19, the output would likely be on the add on
It is an issue to be sure...
Given the DirecTV blade news, it seems MS may be heading this direction. If they want it to work it will need to be similar to how cable and dish do it now with video on demand, not so much a normal internet type download...also they should allow offloading the data to a PC or external HDD. No matter how much they want to make money selling bigger HDDs the sizes needed will be far too high in a laptop HDD (what the 360 uses)
James @ Feb 17th 2006 1:10PM
I think there is a greater degree of variability with respect to the speed of downloads on XBL than most realize. I can consistently pull 1MB/sec downloads on my PC, this equates to about 18 minutes per GB. It took me over an hour and a half to get the PGR3 demo. Anybody have any ideas as to the difference? BTW, I'm using an ethernet cable, so there aren't any wireless gremlins at work here either.
AlanS @ Feb 17th 2006 1:43PM
I don't get how some of you are complaining about not wanting to download gigs and gigs of information, because it'll take forever and blah blah blah.
Our buddy Bill is talking about the what may happen in the future. Think back years ago when 50 megs was an insane amount of data, now we're throwing around words like gigs like it's nothing.
Maybe technology right now isn't at a point where the average Joe can download gigs of data, but who can honestly say that won't EVER happen?
Current technology allows most users to download music with minimal headaches. Apple's runaway success is proof of that. They files are small (again, by today's standards.) Now, the new thing is to be able to download TV shows, and such. It would seem to me that the next logical step would be downloading of full fledged movies.
You can't do it yet, but I don't think it's very far off, and it is a highly likely possibility.
GrumblyStuff @ Feb 17th 2006 2:31PM
Fucking balooney. They want digital distributation because it's more profitable and easier to screw the customers.
It's no longer YOUR DVD or CD or game. It's theirs; you just paid them to view it. You can't make backup copies. You can't convert it to other formats. And god help you if you invite friends over to enjoy it too.
All your left is some data on your computer of inferior quality. And again, no copying, no converting, no backups but, oh, feel free to buy it again if you should lose it.
They're trying to kill physical media formats. >=(
Anticrawl @ Feb 17th 2006 2:53PM
Haha, I didn't even bother to read any of the comments above because most of the joystiq bloggers can't really think outside of the box. Not saying there are some really good ones up there, and I eventually will read them all but this is what I have been thinking all along. Why make two nearly identical formats? Why would Microsoft endorce HD-DVD. Well save the blatently obvious reasons I had always thought it was a conspiracy to cause both formats to fail. At first I realized neither would most likely succeed. I'm glad that this is their plan. The world isn't ready for and doesn't need this yet.
I have been dreaming for a day when we would no longer have to buy hard copies of our movies or go hunt them down. It's a sensible thought though, what Bill Gates hinted at. With harddrive sizes increasing rapidly and driving price down and the great leaps in computer related technology I believe it would be quite possible within a few years. Now even. Look at wireless connections. Right now my router can max out at about 120 mbps. Not only that but we have cheap and efficient holographic cards(not the shitty ass discs) coming out soon that will cost CONSUMERS less than $1.00 dollar a piece, not manufactures, consumers, meaning you will pay less than a dollar for a plastic looking thing as thin as business card and about the same size that holds(as of now) 30gb. It's insane, and the pathetic disc versions read at 200mbps, the cards most likely work like flash media in a sense of speed. It's facinating. Currently though if you bought a player for the holographic cards it would cost about $1,800. But for cards that cost less than 1 dollar, it will pay itself off in no time. Now why do you ask that I brought this up all of the sudden? Well I figure we will get to a point where we all have media center like devices(much like things we have today) that hook up to your tv and take over the vcr/dvd player. When a commercial comes on(through the digital signal that is required soon) advertising a new movie that's out of theaters it will have a link to a server where you purchase the movie all from your dvd remote. Of course this will all be via the internet. I imagine it won't download a permanent copy to this device. Just stream the video on demand to your box after you pay and leave a cookie type file on your player saying you have access to it whenever. In addition to that, if they incorporated the tech, when you stream it on(say in a way where the movie is entirely on your device before it is deleted) you have a chance to make a hard copy of it with your less than one dollar holographic cards and keep it on hand to watch say on the road or if you loose connection or for whatever, just to be an option.
I decided to not go into detail of the thought and just give the broad general idea. Maybe it will brighten your mind and let you think outside the box for once a little. I thought of all this back when I heard the disturbing news of a new blue-laser tech instead of this method being the new format. Not only that the red laser hasn't been fully utilized yet. Just search google for VMD one day and check them out. No matter how much you like Sony or Toshiba, neither are trying to make the market better, they are trying to make money, even if they have to trample and abuse the consumer to do so. They are too arrogant, and hopefully it will be the downfall of this supposed "next gen format".
By the way I would like to point out I am in no way a microsoft fan, and I find it sad that it took them to actually bring this plan to the public without it being anything more than a nice thought. Haha, nobody likes microsoft. Microsoft beats me at night and touches me in bad places. But the only alternative is to run away and live with Mac, sure it will be painless, but generally death is painless, because you no longer exist.
Pixels for my people,
Anticrawl
Rabid Pancake @ Feb 17th 2006 3:01PM
"In terms of movies, I often say that this is the last format battle there will ever be, because everything is going to go online -- you're going to download it."
I guess Bill has never tried to download one of the 5 minute long 720p tailers on X-Box Live Marketplace. Takes a good 20 minutes, so unless he plans to release some sort of X-Box Live Plat where they install a T3 line into your house/apartment I have serious doubts that anyone is going to be download full 720p movies with the X-Box. Oh yah, and don't forget to buy another HD for your already obsoliete one that cost 100 bucks, but don't worry, the new and impoved one allows you to transfer files to your mem card and also supports the ability to have TWO full HD movies on it. Preorder now, only 300USD!!
The ZeroCorpse @ Feb 17th 2006 3:12PM
#29: Twenty minutes? Are you on a cable modem, by chance? Sharing your bandwidth with everybody in the neighborhood? Because that's not very fast. I get movie trailers in less than 1/2 the time on my DSL!
Anticrawl @ Feb 17th 2006 3:23PM
Yep, a service much like that #11, was looking for that link actually. Actaully saw a few people who seemed to like this idea. While I don't doubt Microsoft's ambitions, they aren't doing this just to spite other companies. It is something to help the market in the long run. Media is quickly already taking this form, especially in the music department. Who's to say movies and even(hopefully soon, maybe next gen)full games will be entirelly digital, leaving the option ot have hard copy up to the consumer.
$1.95 per movie for a one time fee added to a DVR-esque media center that streams video and a chance to make a hard copy with a Holographic Versatile Card that will cost us less than $1.00 dollars each makes for a very very very happy consumer. Those cards take up little to no space and hold 30gb in their lowest form and so far go up to 1.6tb.. Not only that, I imagine that would lead to holographic permanent storage, much like hard drives are used now. Haha, imagine a computer where the 10tb "harddrive" only cost you $10.00 dollars.
Pixels for my people,
Anticrawl
selgado @ Feb 17th 2006 5:33PM
I believe that Microsoft is allowing Sony to get carried away with a soon-to-be obsolete technology. If Sony invests a huge sum in this technology and it is as short lived as Microsoft hopes, Sony will never recoup the investment it laid out and it has the potential to cause significant financial damage to Sony, giving Sony enough rope to hang itself. Now I'm not a 'doomsday prophet' and it won't be the end of Sony, but gives Microsoft that extra leg up, however small or large.
vaylen @ Feb 17th 2006 8:51PM
This reminds me of how the US waged war with money. The North Vietnamese are about to win their "format war" over another force? Well, they represent a "format" (communism) that we didn't like, so the strategy was to throw money at the other side to make it harder for them. It did slow them down at considerable expense to us, but the last time I checked North Vietnam was still the winner, and so will Blu-Ray be. Microsoft won't bankrupt Sony by throwing money at the other side. In fact, they will simply become synomomous with the loser of the war. Sony will surely have paid more for Blu-Ray to succeeed than if Microsoft did nothing, but in the end they will still be associated with the winning side. And when Microsoft comes crawling to the table to include the industry standard Blu-Ray drive on the Xbox 720, Sony will recoup their losses from them at that point... plus interest. Nice move, Billbo of the Gatespeople. You need to stop listening to Ballmer's rants... Every time you listen to him you hemmorhage money (WebTV, WindowsCE et al)
Wild Homes @ Mar 13th 2006 12:55AM
I'm ready to avoid this war already. the DRM issues are frustrating, and the HDCP issues are really awful for anyone with an older HD display. if Oblivion sneaks in at only five gigabytes, and the PGR3 demo is more than a gigabyte itself (and only about an hour to download), then I really don't see that additional space becomes a huge issue for gamers in this generation. so it's a question of movies, right? that's why the PS3 is BD-- to lead the charge. will the japanese and americans buy the console simply to have a cheaper BD machine? maybe. but to me the question is: why is Sony AGAIN not making moves regarding a GAME MACHINE? to wit: the PSP, cool multimedia device, but so far a rather shite gaming machine, even if that one analyst figured there'd be FIVE GTA title for the PSP in the next five years. and from here, Sony: if you put BD in the PS3, and it's only 2X, and it's got a lower transfer rate than the 360's standard 12X dvd drive, is it worth it to suffer load-time issues just to push your new movie player into american homes? I've considered my feelings on it, and I'm down with the downloadable games and movies. I'll pay for whatever broad-er band service I'll need. I'm not going to spend money on HD-DVD, or BD, or whatever sinks-my-battleship new-and-soon-obsolete thing wins out here: it's only winning second place. Microsoft will have downloadable XB1 games in the marketplace soon, and that will be a proof of tech (and idealogy) to push Sony off a bit, I think.