Blame Blu-Ray: How Sony’s Hubris is Killing the PS3

It’s not hard to make fun of Sony–not anymore at least. Every day brings another PR debacle that any clear-headed company could easily have avoided. The recent Kotaku incident is just one example. While it’s easy to lambaste Sony for every stupid decision they make, I think we’re better off trying to understand the events that led to this current state of affairs. Looking back, I believe there is one particular thing to blame for all of Sony’s current problems: Blu-ray.

More-so than just the technology, it seems as if Blu-ray is more significant to Sony for what it represents: The possibility of complete domination over the high-definition movie disc market. After the astounding success of the DVD platform, Sony must have realized that they would become kings by controlling the next generation disc market. Why else would they refuse to work together with the DVD Forum, a group they helped create, to create a unified HD disc platform?

Greed led them to split the HD disc market in two with HD-DVD in the opposing corner. It was a move which has hurt them in the past with Betamax and Super Audio CD (SACD). Betamax is a fairly common reference for failed media formats in the consumer space, but I find SACD to be the more interesting example because it’s so obscure that most geeks have never heard of it! Simply put, SACD is a successor format to CD that offers multichannel and higher resolution audio. Its rival is DVD-Audio, a technically similar format backed by opposing companies. Sound familiar?

Although both formats have been out since 2000 they have failed to attract any support outside of audiophiles due to the high cost of hardware on both sides, and a public shift towards downloadable (and lower-quality) content. We are just now beginning to see inexpensive players that support both formats which will most likely lead to the end of this particular format war. Deja vu? Indeed. History has shown us that multiple formats cannot survive in the market place; one will either have to die (Betamax), or there must be convergence among opposing formats before consumers begin to adopt them.

Given this historical framework you’d have to be crazy to split up any next generation media market again, but then that’s just what Sony did. But why? What made them so cocksure as to think they could fight this battle again and win? Enter the Playstation 3.

Remember that part of the reason the Playstation 2 was initially popular in Japan was that it also served as a very cheap DVD player. (By the time the PS2 reached our shores it was less competitive in that respect.) Sony must have figured that they could repeat the same sort of success with the PS3. So what better way to make your shiny new (but as of yet unproven) format a success than to bundle it with a product that’s sure to have massive market penetration? I’m sure somewhere along the line, this thought process was shared by many the Sony elite. Sadly, I still think they believe their scheme will succceed despite the mounds of evidence to the contrary.

Forcing a new standard on people is always harder than having them willingly adopt it. With the PS2 and DVD people finally saw an escape from unreliabe and grainy VHS tapes, and it was also supported by the majority of TVs. With the PS3 and Blu-ray, Sony was faced with convincing people that it’s worth upgrading their standard definition TVs and away from DVDs, both of which are already “good enough” for most folks.

Even though the DVD platform has been mainstream for years now, I’m fairly certain most folks still don’t take full advantage of it. How often do you come across someone actually using a surround sound setup with their DVD player? (Let’s not even get into progressive scan video.) While this may be an anecdotal observation it is still something worth thinking about. If so few people take full advantage of DVDs, why would they need to upgrade to an HD disc platform right now?

This is where I believe Sony’s prognostications failed them. You cannot force such a new and expensive format on consumers and expect them to bite. Things like this need to happen naturally out of demonstrated need at the consumer level. Now the Playstation 3 is the ugly red-headed step child of the next generation consoles. Just like the Playstation Portable, Sony diluted the console by pushing movies to it when nobody wanted them, and because of that the games sufferred.

Consider how many PS3 issues are directly related to the inclusion of Bluray. Most importantly, that the shortage of blue-laser diodes led to a massive hit in PS3 production, and the inclusion of Blu-ray led to the extremely high cost of the PS3. This is just speculation of course, but considering that the Blu-ray stand-alone players still retail for $700-$1000, it’s not hard to fathom that without Blu-ray the PS3 would have actually been price competitive with the Xbox 360. Perhaps, even at the same $299-$399 price points! Despite having a bigger hard drive and the new Cell processor, it’s obvious from the stand-alone players that Blu-ray is a significant factor in the PS3’s high cost, if not the most significant.

And for what? How exactly did Blu-ray help the PS3 as a gaming console? Sure the games have a lot more room to breath but it’s still going to be a long while before they actually need all that space. That’s pretty much it. Blu-ray discs will not offer any significant advantage for PS3 games until all of that space is needed. The glaring reality is that Blu-ray isn’t in the PS3 for games, it’s there for movies.

The big problem with this is that the gaming community is ready for the PS3, but the home movie community isn’t ready for Blu-ray. PS3 owner’s don’t have a choice though–they unwittingly pay for Blu-ray technology despite whatever their impetus to watch Blu-ray films may be.

One good thing that may come out of including Blu-ray with the PS3 is that Sony has future-proofed the console moreso than the Xbox 360 or the Wii. I’m still not sure if that’s necessarily a good thing though. HD-media probably won’t really hit it off for the next few years, and in that time both the 360 and Wii will drop in price while the PS3 will have to maintain the higher price point. If Sony honestly expects the PS3 to last longer than the 360 or Wii then they’ll have to worry about newer consoles from both MS and Nintendo in four years or so.

Given everything they’ve already sunk into the PS3, Sony may not even be able to afford to build a new console in time to compete. When faced with that situation a few years down the road, they’re only going to have one thing to blame…