Sony CEO Calls Next-Gen DVD War a Stalemate

[Sunite]

Sony CEO Calls Next-Gen DVD War a Stalemate
By Barry Levine
November 9, 2007 8:58AM

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Sony CEO Howard Stringer's use of the term "stalemate" is a far cry from the days when Sony was confidently predicting that Blu-ray would beat out HD DVD in the next-gen DVD wars, said Jupiter Research analyst Michael Gartenberg. But there's no evidence at the moment of serious discussions for merging Blu-ray and HD DVD, he said.

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   Sony
   Blu-ray
   Toshiba
   HD DVD

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   When the top general of one army says the war has been fought to a draw, can serious peace negotiations be far behind? That question was raised Thursday when Sony CEO Howard Stringer said that the war between the Blu-ray and HD DVD formats is now "a stalemate."

In comments to the Associated Press, Stringer described the struggle as "a difficult fight" that was primarily a matter of prestige for the winner.

That fight was made more difficult for the Blu-ray camp in August, when Paramount switched exclusively to the HD side. Stringer indicated that the switch had a major impact on Blu-ray's momentum. "We were trying to win on the merits, which we were doing for a while," he told AP, "until Paramount switched sides."

Retail Wins and Price Wars

Blu-ray had been posting a string of victories this summer, such as June's announcement by Blockbuster that it would sell only Blu-ray players in its stores, although it would continue to stock both disc formats. At the time, BJ's Wholesale club also said it would stock only Blu-ray discs. And a recent industry report indicated that 2.6 million Blu-ray discs had been sold from January to September, compared to 1.4 million HD DVD discs.

But HD DVD has been grabbing some momentum as well. Most notably, last weekend Wal-Mart offered the Toshiba HD DVD A2 for $99 in a "Secret In-Store Special." The price included five free movies by mail. Best Buy also had recently offered the same model under $100, which sold out.

These were the first reported price tags for a high-definition DVD format that broke the $100 barrier. The least expensive Blu-ray player is about $375, with some industry observers predicting the price will be mid-$300 by the time the holidays roll around.

On Halloween, BetaNews reported that Kmart decided to drop the higher-priced Blu-ray players and offer only HD DVD machines for the holiday season.

90,000 Toshiba Players Sold

If the past weekend is any indication, the lower-priced HD DVD players are building a sales wave as they head into that all-important holiday season. Earlier this week, You are not allowed to view links. Register or Login reported that 90,000 Toshiba players were sold through several retailers in the last weekend alone.

But it also reported that Sony's $100 drop on the 80-GB PlayStation 3, to $399, had doubled that console's sales figures in the past 30 days. A major portion of Blu-ray's installed base comes from its inclusion in the PlayStation 3.

As the war swings back and forth, Jupiter Research analyst Michael Gartenberg cautioned that it's still early. But he said that Stringer's comments "do show that these guys are cognizant that HD DVD, at this lower price point, is now competing" mostly with higher-end DVD players instead of Blu-ray.

Stringer's use of the term "stalemate," Gartenberg noted, is a far cry from the days when Sony was confidently predicting that Blu-ray would be the dominant format. But there's no evidence at the moment of serious discussions for merging the formats, he said. The discussions that have occurred, he noted, have generally come down to "merge on my format."