Blu-ray Disc Versus HD-DVD – What Sony Should Do With The PS3

The Blu-ray Disc camp has been crowing in recent weeks about how it has already won the next generation movie disc format battle, touting the fact that in early January, there were twice as many Blu-ray movies sold as HD-DVD. The Blu-ray folks are right, based on numbers I’ve seen, that they are outselling HD-DVD movies, but the differences are slim, and the numbers are very low.

Sony, in particular, has been posturing about the “large” numbers of PS3 systems sold since that platform was released in mid-November 2006. Every PS3 system incorporates a Blu-ray player. By my estimates, according to data from Sony and NPD Group, as of the end of January, there were 1.25 million PS3 sold (one million through end of 2006 per Sony, 244,000 sold in January per NPD). Combine that with the standalone players sold, and you add maybe another few hundred thousand.

That compares with just a few hundred thousand HD-DVD players in the same time frame – about 262,000 in 2006 (170,000 standalone units per the HD-DVD group, and 92,000 HD-DVD add-on Xbox 360 drives), and some relatively equally smaller number in January 2007. For argument’s sake, let’s say that by the end of January 2007, there were 1.5 million Blu-ray capable players vs. 300,000 HD-DVD capable players in consumer’s hands. The actual exact numbers don’t really matter, but what is striking is that this means there are roughly five (that’ 5!) times as many Blu-ray players out there as HD-DVD players.

But most of those Blu-ray players are PS3 game consoles. Sony’s posturing about Blu-ray player sales in the form of PS3 game consoles is just that – posturing. That’s because only a fraction of the PS3 users out there are buying Blu-ray movies. Look at these numbers from an article in Next Generation less than a month ago, where Sony Computer Entertainment America is quoted as quoting NPD Group as saying that cumulative Blu-ray movie sales at the time stood at 439,000 units vs. a cumulative 438,000 HD-DVD movies. In my book, that’s a dead even race. But more importantly, it shows clearly that people are not buying Sony PS3s to watch Blu-ray movies. If they were, the Blu-ray movie numbers would be three times what NPD Group says (according to Sony).

Those numbers imply a tie ratio – the ratio at which movies are tied to players – as approximately 0.33 for Blu-ray players, and about 1.4 for HD-DVD players. However, in the short run (i.e., the present), all these numbers don’t really matter because they are still pretty small in the grand scheme of things – high-definition movie playback is for all practical purposes still a niche market, and anyone claiming to be king of that market is making a mountain out of a mole hill. It’s not until the installed base of players numbers in the several tens of millions that this market will be a real mass-market.

So what’s Sony to do get people to start using their PS3s to watch movies instead of just playing games on them? I have a short list of suggestions:

1) Include a real DVD remote with each PS3. You can now buy a $25 Sony-branded Bluetooth Blu-ray DVD remote control for the PS3, but it really should be included free with every PS3 if Sony is serious about the PS3 being a real Blu-ray player.

2) Add an infrared (IR) port to the PS3 so that folks can use their universal home theater remote controls to control DVD and Blu-ray DVD playback on a PS3. For older units this can be a USB add-on, and for newer units it should be built it. Blu-ray is supposedly a home theater delight, so why shouldn’t consumers be able to use their home theater remotes to control it? Bluetooth is “cool”, but IR is the standard for remotes.

3) Provide decent DVD upscaling so that older DVDs still look decent when played back on the PS3 on that nice new HD-TV. This would provide people with greater purchase justification for the PS3, as they could then sell their old upscaling DVD player on eBay (not that it would bring in much money, but it’s still a great rationalization point).

4) Offer a breadth of family-friendly games so that moms and non-game playing spouses would feel better about having it in the family (or communal) living room. Nintendo has done this so very right with the Wii, but meanwhile among the sparse assortment of PS3 games, you pretty much have only Mature and Teen ESRB rated titles.

5) Include a way to write to PS2 game cartridges as well as the current optional dongle to read them, so that the living room PS2 can truly be replaced by a PS3, as opposed to only kind of, somewhat, almost replacing the PS2 (and that’s in the U.S. – European PS3 will have far greater PS2 compatibility issues when they ship).

6) Rebrand the PS3 as a Blu-ray disc player which also plays games, instead of a game console which also plays Blu-ray discs.

Without better addressing PS3 owner apathy in using the PS3 for playing Blu-ray movies, the tie ratio for Blu-ray titles to Blu-ray players will continue to embarrass the Blu-ray camp as it becomes more and more obvious that the majority of PS3 owners aren’t watching movies.