Blu is the New Red


High-Def Digest is running with a story this week about the mysteriously missing BluRay drives at LG’s Dealer Show in Orlando, florida.

Addressing questions about the lack of Blu-ray products at the show, LG product development director Tim Alessi had this to say:
“We have heard and read about a lot of delays [of Blu-ray product releases],” he said. “We recognize the huge opportunity but we will provide an announcement when the time is right.”
Alessi later clarified his earlier statement. “I didn’t say we weren’t going to have a [Blu-ray] player. I just said we aren’t going to announce it today. We are going to continue to look at all aspects of the market to come up with the best solution.”

It’s been no secret that Sony has been having trouble getting enough of the blue laser diodes manufactured for their PS3 consoles and consumer BluRay players, and they and Pioneer both recently announced that their commercial BluRay players would be delayed, while offering no explanation.

Meanwhile wholesale destruction wrought on unsuspecting laptop users’ workstations, carpets, ammunition and airplanes by Sony-made lithium ion batteries has put a nice dent in the company’s profitability to the tune of 51.2 billion yen. This from a company which desperately needs to convince consumers that they have their technological stuff together, as they enter into what looks to be a tight race for next-generation game console market share.

They hope that consumers will appreciate BluRay’s improved quality over standard DVDs. They hope that consumers will appreciate that BluRay holds slighty more data than the competing standard, HD-DVD. They hope that consumers will appreciate that their PS3 online service (which was as recently as last month unsupported by the machine itself) is free, compared to Xbox Live, which costs around $4 per month. They hope that consumers will appreciate how shiny the PS3 machine is, and how many extra features it offers, versus the Core model of the Xbox 360. They hope that consumers will not mind that it costs more, and will be harder to find this holiday season.

That’s a lot of hoping going on in Tokyo.

My father had a saying about hopes. My father had a saying about everything, but this one was particularly colorful. “Hope in one hand,” he would say. “S*** in the other. See which one fills up first.”

Meanwhile the lack of blue lasers adds up to an excess of red ink on the balance sheet at Sony headquarters. Without enough consoles in stores this holiday season to feed demand, Sony will lose potential market share to rivals Microsoft and Nintendo, meanwhile postponing (perhaps indefinitely) the date at which penetration of the PS3 device will generate enough software and peripheral (and online microtransation) sales to offset the device’s extremely high production cost.

For those of us who’ve been following the console “war” for the past year or so, the big question is obviously no longer who’s going to win, but rather, how long it will be before Sony realizes that they’ve lost. For even if they do manage to eventually move more units of their PS3 than Microsoft or Nintendo can of their next-gen consoles (which will be more readily available this holiday season), it’s looking less and less likely that it will make any difference in real financial terms.

What do you do when you’re playing high-stakes poker with the wealthiest company in the world and the most profitable game company in the world and you have a lousy hand and you’re over 80 billion yen in the hole? maybe that’s the big question in this story.

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