This is likely going to start moving towards HD-DVD now that studies are showing that the PS3 is not only not selling particularly well compared to the other players but that near half of the folks that bought them aren’t using them for watching movies.

With HD-DVD players under $250 and including free movie incentives, going into the 4th quarter, unless Blu-Ray can respond effectively on price (currently there is almost a 2x price delta) this should be a route during the Christmas buying season and HD-DVD already has a significant lead in installed dedicated players.

It did look like Blu-Ray was finally starting to catch up as movie sales were almost 2x in favor of Blu-Ray but that is a hard measure because, typically, this has as much to do with how good the title is as anything else. However, when 300 came out on both formats, the Blu-Ray format did outsell the HD-DVD format but not by as much as the 2x overall sales numbers would indicate.

What folks don’t often understand is Consumer Electronics is a 4th quarter market, the rest of the year almost doesn’t matter and if, as expected, HD-DVD players drop below $200 into that magic area where people can justify them as gifts they should by a huge margin outsell Blu-Ray unless Blu-Ray players can price match (which will be difficult given the cost of the hardware is much higher and Sony is already incurring massive amounts of red ink on their PS3).

Paramount and DreamWorks http://uk.reuters.com evidently see this coming and are picking a side (I think everyone agrees we can’t have two standards or both lose) and are basing their choice on the technology that will likely grow the quickest and, right now, unless Sony can respond that’s HD-DVD.

For Sony this is likely to even get uglier. If it were not for the PS3 their best path would be to exit but, with the PS3 tied to Blu-Ray they can’t. This gives them three likely paths, double down and match price with HD-DVD and try to reverse this emerging trend and set a record for red ink in 2007/8, exit and come up with the PS4 with just DVD or HD-DVD support at a more competitive price to the Wii addressing two problems as once, or do nothing and likely lose on the Blu-Ray front anyway.
It would seem like cycling the PS3 early would be the best path, but the transition could very well cost them the gaming market and they aren’t ready to make it anyway.

All three of these choices are bad and it is amazing they put themselves into this ugly competitive position. If there was ever a company that should run screaming when an executive comes up with a proprietary storage media idea like BetaMax, Memory Stick, Universal Media Disc, Mini-Disk, Professional Disk for Data, HiFD, Music Clip (failed attempt at iPod like system), and Super Audio CD it’s Sony. Seriously they have not only virtually never been successful at driving their own standard (I didn’t list the MMCD as a failure because they actually partnered with Phillips and Toshiba to create the DVD which replaced it). http://dubiousquality.blogspot.com It almost looks like a curse given how this seems to consistently end badly for Sony.

In virtually all cases the Sony technology was both more restrictive and more expensive than the technology that eventually ended up being commonly used. There is a lesson in here someplace; there are a lot of folks, particularly at Sony, that should probably learn it.

They evidently did have once success, the 3.5” floppy in 1983 is attributed to them.