Toshiba Responds to Blu-ray Sales Blip
by Pravin on January 24th, 2008 in news.
I’ve referred to the smack talking against HD DVD as the “flavor of the month” before, and the most recent example of this has been fueled by leaked sales statistics from the NPD suggesting that Blu-ray players have a near complete hold of the market. In general, the NPD numbers are reported for longer periods of time like a month or quarter so that sales blips caused by special promotions don’t generate sensational news. In this particular case, someone with access to the weekly data leaked the information out, and everyone subscribing to the flavor of the month plan has fallen for the bait.
If you look closely at the numbers being reported, Blu-ray players saw an increase in sales by almost 4,000 units than the week before, while HD DVD players took a big nose dive. The HD DVD dip is not good news, but did these new Blu-ray sales come at the expense of HD DVD player sales? I’m sure many did simply because a person is either going to buy one or the other kind of player, but here’s more illuminating information released by Toshiba spokespeople just a short while ago:
As you may have seen, there are attempts being made to portray NPD’s weekly sales tracking figures for next generation DVD as a trend. We want to remind you and make clear that it is not accurate to make long term assumptions based on one week of sales – a cautionary point that NPD has made as well. The facts are that during the week that is being singled out, both Blu-ray disc players and software were being given away for free with the purchase of 1080p TVs. It is also important to note that the instant rebate promotions that had previously netted Toshiba’s players’ MSRP’s to $199 and $249 had actually ended on Jan. 5th – causing an increase in HD DVD’s MSRP back to $299 and $399 during that same week. Since Toshiba’s retail price move on Jan. 13th to $149 / $199 – Toshiba is seeing very positive sales trends at retail. This reinforces the fact that price is a significant driver of sales.
In other words, wait for more NPD reports and take a look at the bigger sales trends instead of weekly blips. Even NPD agrees.
Toshiba’s assertion is that consumers are cost-conscious and respond to sales and freebies. Hobbyists may be less price sensitive, but the general population is not, and they’re responding favorably to the HD DVD player price cuts.
In the weeks that Amazon, Best Buy, Circuit City, etc. have had their two-for-one movie deals or player promotions, the corresponding HD DVD products have done really well. When those sales end, consumer buying habits return to normal. In the several months that I’ve been monitoring movie and player deals at this blog (which you can verify by going through the archives), the two-for-one movie deals only started around December, and HD DVD sales numbers did exceedingly well during those promotions. If one was to pick only those weeks of good news to report about HD DVD, then it’d be easy to say that Blu-ray was being trounced.
In the end, this is what the format war is all about. Numbers and statements go flying left and right, with each side able to figure out a way to show how they’re making a difference. Anybody who thought it was over can now be reassured that there’s still more coming.
January 24th, 2008 at 4:11 pm
It will be interesting to see what Toshiba does at the next sign of adversity. With the retail price of these players reaching that of standard DVD players, there is not much more room for more in the ‘drop the player price’ tactic which so far has not yielded much in the way of results. In 2007 Toshiba lowered prices and gave away discs, continually lowering the effective pricing of the players, including the $100 sales in November. Yet at years end, we see NPD report that the standalone player ratios for 2007 were 49:49:2. And they seem to think that lowering the prices will be the answer moving into 2008? How about something new and different like delivering compelling content on HD DVD? It seems to me that this ‘more of the same’ approach is not very smart…
January 24th, 2008 at 4:27 pm
It’s not really up to Toshiba to deliver on the movies, that’s something that the studios need to work on. I’m not sure how these buy-one-get-one deals get worked out, but it would be nice to see more of those, or just plain outright sales on discs that people want to buy.
I’m not sure what specifically you’re referring to about “compelling” content.
January 24th, 2008 at 4:38 pm
With the amazing sale prices on the Toshiba players leading up to and continuing beyond Christmas there should have been a decent jump on households who own HD DVD players– the problem is, since those families opened up their HD DVD players on Christmas, there hasn’t been any new HD DVD movie releases worth a d*mn. Review the HD DVD movie releases in the past month or so and discuss.
January 24th, 2008 at 4:46 pm
With regard to compelling content, Transformers and Shrek 3 were a step in the right direction. When we see titles like Cars, Ratatouille, Pirates of the Caribbean, Die Hard, Spider-Man, etc. coming out – that is compelling content. The only compelling content scheduled for Q1 2008 I can see is American Gangster, Bee Movie and maybe Beowulf – those these are hardly the kind of ‘must have’ titles that can sell people to a format. Universal and Paramount need to bring some serious catalog like Godfather or Back to the Future, Indiana Jones, etc to make a viable format out of HD DVD. Considering that HD DVD lacks franchises like Bond, SpiderMan, Pirates and Die Hard, and will lose Batman and Potter moving forward this year, the studios need to step up. I don’t see that Toshiba has any room left to make a difference – now the studios have to play their part.
January 24th, 2008 at 4:49 pm
Also of note, if you check High Def Digest, Warner has more HD DVD titles announced than Paramount, Universal and DreamWorks combined. That is an indication of the trouble that is brewing for 2008 for HD DVD.
January 24th, 2008 at 4:57 pm
Universal and Paramount have huge catalogs to draw from, and I’m sure there’s a lot of pressure on them at the HD DVD meetings to release more. There are certainly a lot of HD DVD users who’d like that too!
They’ve got some promising new theatrical releases for this year like Cloverfield, Ironman, Hulk, Hellboy, and others that should keep the “compelling” factor going.
January 24th, 2008 at 5:19 pm
Don’t forget too that you can buy Imports, since HD DVD is region free, and play them on your HD DVD player. Titles like Resident Evil, and Terminator 2 will play on your HD DVD player. So Blu only titles in the US are not so “only” in other parts of the world. They might cost more, but if you really want it you will buy it. Remember just a couple of weeks ago HD DVD was outselling BD in Europe.
So keep your hopes up and remember the US market is not the only market. The real way to voice which side you want to win is by buying the movies that support it.
January 24th, 2008 at 5:40 pm
I completely disagree with the lack of compelling HD DVD content. Netflix has hundreds of HD DVD movies for rent. I have 96 HD DVD movies in my queue now. You can buy hundreds of HD DVD movies on Amazon. Most of which you can’t find in your local Walmart. I own 15 and they are pretty compelling. I am looking forward to Jack Ryan Collection, Beowulf, and Cloverfield.
January 24th, 2008 at 5:56 pm
I still think I have right to be concerned about the format if my Best Buy has four shelves for Blu Ray and 1 for HD DVD. The format needs more movies to succeed, and my folks have been cautious in the prospect of going in the HD DVD/Blu-Ray scuffle in the fear of having to do some double-dipping. Though I hate to say it, Blu-Ray has more of what I want, but my decision will be made when they get their 2.0s out. until then, I hope HD DVD can get more studio support, because formatwarcentral.com is reporting they are hemorrhaging their garnered smaller, independent, and porn studios.
January 24th, 2008 at 7:00 pm
Toshiba should subsidy the discs. The remaning studios should output only combo discs and no DVD, put them at the same price as normal DVD’s. People will buy them to play on their normal DVD’s. Then after a couple people might get the idea to get an HD player for the movies they already have.
January 25th, 2008 at 5:52 am
Compelling, seems to be the big word here. $160.00 Toshiba A-30 1080p HD player! that compelled me to pull the trigger on HD. I had recently bought an up-converting dvd player for almost $100.00 more, I found the HD player at this price on Amazon very COMPELLING. They have plenty of HD DVDs available, so I will support them. Any titles that aren’t available in HD, no biggy, I buy the DVD and sacrifice only a small amount with the up-conversion capabilities of this player.
January 25th, 2008 at 6:40 am
“War is over, (if you want it)”
Sorry guys the Format war is over…. Do you think that People are honestly going to buy HDDVD now that they are down to 2 studios? Microsoft lost the war for you guys by not integrating the HDDVD drive with games of their own.
I bought a PS3 only because of the Blu-ray drive giving me the ability to play movies until this war was over. Therefore if HDDVD won I would not have a useless player with no support. Conversely I do not have to shell out any more money for a Blu-ray player now that it looks like they are the winner.
I was lucky to support DVD vs Circuit City years ago (DIVX) and now play it really cautious…. Have only one Blu-ray movie and I rent what I want to watch….
Sorry guys.
January 25th, 2008 at 7:42 am
“Mission Accomplished” I suppose.
The format war is in a guerrilla phase now, where the installed base gets to come out and fight instead of the super powers forcing the outcome on them. The current strategy appears to be to get a ton of players out there so that it can be said, “if the war is over, then why are people still buying?” This is not the same as, “why are you still selling?” People who ask this latter question tend to be the Blu-ray supporters.
I’m sure blu supporters will have another take on it. This site is obviously not neutral in the matter, and I’m not inviting blu fans to come out and debate me here – there are already “smackdown” discussion areas available at popular forums like HighDefDigest for that. But if you can keep it logical and civil like Dave did, and keep it on-topic, then you have a good chance of getting your comment approved.
January 25th, 2008 at 10:07 am
“Do you think that People are honestly going to buy HDDVD now that they are down to 2 studios? Microsoft lost the war for you guys by not integrating the HDDVD drive with games of their own.”
There’s no way Microsoft could have made HD DVD standard in the xbox 360. They had to release it in 2005(before HD DVD was launched) so they could stop Sony from dominating with the Playstation 3. Also if they had made it standard the Xbox 360 would likely be more expensive and that would have affected sales.
January 26th, 2008 at 6:14 am
If Sony did win the war…and they may have, it came at a big cost. They sacrificed their place in the game console war. The PS3 still lags behind the XBOX and Wii consoles in popularity and quality of games available. I have a PS3 along with an XBOX and the difference in available top filght games is startling. Frankly the PS3 is a far better media center than it is a game console. I use it for BluRay and as a music hub but the only game I play on it is Assassins Creed. Sony simply does not have a Halo or a Gears of War type game to compete. I have to think if Sony had focused more on the PS3 AS a game system that they would be in better shape. Did Sony cut off their nose to spite their face? As for me I still opt for HDDVD when the disc is available in both formats.
January 26th, 2008 at 6:57 am
Before the PS3 fans try to come in and refute the claims about their console being in third place, here are two of many links from unbiased sources that show how the PS3 has been doing against its rivals in 2007:
- http://www.next-gen.biz/index.php?option=com_content&task=view&id=8750&Itemid=2
- http://www.vgchartz.com/
Yes, sales are picking up, and the trend is positive. But there’s absolutely no truth in any statements that the PS3 dominates the 360 (except in Japan). It’s been having a tough enough time outselling the PS2.
January 26th, 2008 at 7:38 pm
And when you take into consideration that the total sales of all High Def player sales are only a tiny fraction of next generation gaming systems, Sony’s decision to make it primarily a media player has cost them far more than if they had done as Microsoft did with the Xbox and offer high def as an add on. For every dollar Sony may make in the BluRay/HDDVD format war may cost them thousands in the gaming war.
January 27th, 2008 at 12:00 am
From a business standpoint Sony made a brilliant move in putting blu ray in the PS3. I 100% guarantee you that if the PS3 did not have blu ray things would be different. Blu ray would be in the same position that HD DVD is in right now, perhaps worse.
The amount of money sony will get from blu ray(if it becomes standard) will far outweigh the profits from the PS3.
January 27th, 2008 at 7:47 am
From a business point of view Sony was arrogant and flat out foolish not to offer a 299 price point for the PS3 right out of the gate. Because of the inclusion of the BluRay drive that was not possible. So they abdicated their unchallenged spot at the top of the gaming heap, which generates Billions…bith a B more dollars in revenue than High Def video does or is likely to do any time soon. What they should have done is issue a system without the drive at 399 or less and a model with the drive for those interested. Bear in mind that Sony was a year behind Xbox getting to the market in the first place. They could have avoided that if not for the BluRay drive. How many dollars did they lose their and how muc catch up do they still have to play? Remember high def vdeo discs (HD and BluRay) are still around 3% of the home video market and not likely to displace SD DVD within the next year or two. It is likely that Gaming will continue to grow and ultimately at a much faster rate than home video. I am not anti Blu Ray and in fact own a PS3 for that purpose. At the end if the day I got it for it’s media capabilities so that I could have both HDDVD and BluRay for as much high def video as I can get. But as a business decision Sony’s was a bad one. There is not a chance that High Def video profits, if theer are any at this point, will even approach gaming profits within the next five years. Consider that Microsoft sells their console at a loss and makes their profit on the game software. Then look at Gears of War and Halo sales. Those games sold more copies at $60 than all of the High def videos on BOTH formats this year.
January 27th, 2008 at 7:59 am
Gears of War has toppes 3 Million Unit Sales while Halo 3 sold 3 million on it’s FIRST day. Mass Effect has also sold 1.5 million units. PS3 simply cannot match these sorts of unit sales. Even when they have apopular game like Assassin’s Creed they lose out head to head in sales vs the Xbox. BluRay may be for Sony a case of “One more such victory and I am undone”
January 27th, 2008 at 9:31 am
I’m sorry…but this is a joke. We have to stop freaking out and criticizing every number we see. Week after week after week after week Blu-ray outsells out and typically holds 75 to now 85 percent of the market. Free blu-ray players with tv’s isn’t going to throw that number off much at all. You only get it if you buy some expensive Sony Bravia. So if you want to shave of a couple of percentage points from their 85 percent market…so be it. Regardless….this war is over.
Do you know why the sales are getting worse? Because every sales person at a Bestbuy, Frys, circuit city, etc….can’t honestly reccomend an hd-dvd player when someone asks about it. There aren’t enough titles. It would be a lie to reccomend it to a customer. They aren’t on commission either, so it’s not like it matters to them. When a consumer goes and purchases an hd-dvd player, they are going to ask about it.
January 27th, 2008 at 7:29 pm
It will take a lot of blu ray sales to even come close making up the difference… xbox live has over 10 million subscribers at $50 a year so thats $50 million not to mention what those users buy on XBLM and then add in 8.1 million copies of halo 3 at $60 a pop. Don’t forget that most of the blu-ray only studios are available on XBLM so if you have an xbox and HD-DVD add on you have much more High Def to chose from the just blu-ray. Halo 3 made more in one day then Spiderman 3 did over it’s opening weekend, video games will pass movies in sales very soon.
January 28th, 2008 at 4:04 am
Nice article….
January 28th, 2008 at 4:32 am
It is a nice article. I especially liked the part where they updated it since Jan 11 with comments from Universal’s Ken Graffeo.
You need to improve your FUD tactics, dude.
February 6th, 2008 at 8:45 pm
Well I made the jump. I didn’t want to do it but I’ve gotta go with the titles. I sold out. Got rid of my Xbox 360 HD DVD player and my 10 HD titles and bought a bluray player. I’ve been such a die hard HD DVD fan but seeing a thousand commercials for new movies that say available on DVD and hi def bluray day in and day out have gotten to me. All the movies I want to own. Then to follow it up with Warner and New Line leaving HD DVD I felt there was nothing to hold onto anymore. Universal and Paramount are monsters but how long can they deny it as well? If I’m wrong then shame on me but to me, the writing is on the wall.
February 6th, 2008 at 10:06 pm
What were your 10 HD titles, and are they available on Blu-ray?
Did you get a PS3 or will you have to get a new Blu-ray player later in the year that’s upgraded to whatever features they come out with?
When you switch you want to make sure that you’re not starting at the bottom again because it can be more trouble to work your way back to where you originally were. For that reason, it can sometimes be better to transition over instead. But in your case, it was only 10 movies so your investment was light. Enjoy your new world. At least you’re still in high-def territory and didn’t give it all up to go back to up-converted DVDs.
February 9th, 2008 at 4:29 pm
Toshiba is maintaining some sales by slashing prices but at a cost.
“Toshiba, whose products range from washing machines to nuclear power plants, is also fighting losses in its HD DVD player business, he (Executive Vice President Fumio Muraoka) said, without detailing the size of the loss.” Reuters Jan 29, 2008
February 9th, 2008 at 4:35 pm
That’s part of the game when you’re trying to establish a new platform.
The videogame business (which I think was mentioned earlier in this set of comments) is famous for that. Microsoft and Sony have intentionally taken losses in the first year(s) of releasing a game console just to increase the adoption rate.
February 9th, 2008 at 5:13 pm
Unfortunately, they do not seem to be establishing much with companies dropping them in favor of Blu-ray lately.
[snip]
February 9th, 2008 at 5:15 pm
AAM – go spread your good cheer elsewhere
February 12th, 2008 at 7:31 pm
if anyone here is blu better have a PS3 cause the rest is garbage, super slow start times, lockup on newer movies, fox movies won’t even play in some standalones, yeah nice format, I rememeber, which everyone seems to forget that FOX announced in october that they would have 20 titles to battle with HD- DVD, gee had to back all those up till, March and after, until firmware updates or new machines with 2.0 was out, again nice to all you blu ray owners, sell you stuff thats defective, again stay with $500 PS3 only way to go blu and mine is still not a good as compared to the 1/3rd the price a30, hey once the a35 drops below $200 will buy one of those just for the uncompressed audio, which you can’t use on the PS3.
February 12th, 2008 at 7:48 pm
I’m pretty sure that many of the blu visitors here are PS3 owners. You only get to see the comments that are approved, there are many more that I don’t let through the system simply because they’re immature or illogical, and oftentimes insulting.
Game consoles already cause a certain level of fanboy behavior, and throwing this format war into the mix brings another level to the fanaticism.