High-def DVDs and the console wars

Ever since Sony announced that the PlayStation 3 would be shipping with Blu-ray disc support, the next-generation movie wars have been wrapped up with the next-generation system wars. Now that both the PS3 and the Xbox 360's HD-DVD add-on have been out for a few weeks, the first effects of that relationship are beginning to show. After crunching some numbers, the take away message is relatively simple: gamers do not care about high-definition movies. At least not yet.

This week's NPD data revealed sales of 42,000 Xbox 360 HD-DVD drives and 197,000 Blu-ray equipped PS3s in November. At first this seems like a big victory for Sony and a vindication of the idea that the PS3 will push Blu-ray as a movie format. More than that, it seems like a vindication of the idea that high-definition home movies in general are beginning to catch on. After all, the November sales of these two items alone nearly matches the estimated 275,000 high-def movie players sold through October.

But a deeper look at the sales estimates for the actual high-def discs shows that neither of these ideas really pans out. While you would expect the introduction of nearly 200,000 Blu-ray equipped PS3s to have some impact on Blu-ray disc sales, sales rank data provided by Amazon.com and compiled by eProductWars shows nary a blip in the data since the PS3's launch. Indeed, while the PS3's Blu-ray support likely gives Sony's format the installed base lead for high-def movie players, the Amazon charts still show HD-DVD sales outpacing Blu-ray sales by a good margin on Amazon, suggesting that most PS3 owners are not that interested in the movie format yet.

True, PS3 owners could simply be going to other retail outlets to buy their Blu-ray discs, but considering that the system is currently the 314th best-selling item on the whole of Amazon, you'd think some of these shoppers would throw a few more Blu-ray discs in their cart as well. Yet there is currently not even one Blu-ray movie on the list of Amazon's top 1,000 sellers, while HD-DVD movies have consistently shown at least a handful of products in the same list for the past few months.

HD-DVD supporters shouldn't get too excited yet either. Despite the widespread idea that people buying the Xbox 360 HD-DVD drive would want to buy up lots of HD-DVD movies to go with it, the add-on's sales seem to have had little to no effect on the sales ranks of HD-DVD movies. In fact, HD-DVD movie rankings on Amazon actually declined a little in November and December. This isn't that surprising, considering that the 42,000 HD-DVD sales represents a paltry 1.24 percent of the 360's installed base. With such a small potential market, we can hardly expect Gears of War levels of sales for any discs.

Even if all these new Blu-ray and HD-DVD supporting gamers start buying up discs by the ton, though, the undisputed champion of the DVD wars will still be the standard DVD for the forseeable future. Talking about a few hundred thousand HD players here or there seems kind of silly when you consider that Pirates of the Carribean: Dead Man's Chest sold 10.5 million copies on standard DVD this week. Even if the Playstation 3 puts Blu-ray into 15 million homes by the end of 2007, that's still less than the estimated 16 million DVD players sold in 2005. True, these new high-def player owners could start buying up high-def discs instead of standard DVDs, but assuming that consumers will be willing to abandon the relatively fresh DVD format with the same speed they abandoned the decrepit VHS standard is a bit naive.

While high-def movie supporters everywhere are looking to Sony and Microsoft to finally propel their new formats into wide acceptance, the early sales numbers seem to indicate that, so far, consumers are buying game systems for the games and not for 1080p movies. This could all change in the future, of course, but right now there's every reason to expect regular old DVDs to continue their dominance for a good long while.