More on Blu-ray in a recession – forecast down 25%

October 23, 2008

According to this article from Jacqueline Emigh at BetaNews, Parks Associates (technically a competitor, but a respectable one so I’ll give them their props) has reduced its forecast for standalone Blu-ray players this year to to 4.3 million globally or 2.2 million in the US.

This comes as I’ve been writing about Blu-ray prices falling to $199 for the first time and the economy’s effect on home video overall. First of all, I’ll say that Forrester has never produced a forecast for standalone Blu-ray players so I’m not in a position to comment on the specific number, however it is interesting to note that this new forecast puts the Parks number in line with the Jupiter Research number from earlier this year. (Jupiter Research, as you may know, was a competitor until just a few months ago, we now are one family, which is great as they are some smart folks.) Jupiter had predicted approximately 3 million total Blu-ray homes in the US by the end of this year, on top of just under 1 million last year, which comes out to something north of 2 million in sales this year. So the new Parks numbers line up with the Jupiter numbers. I’m inclined to believe both. (It is important to note that both these numbers are far short of the projections Blu-ray manufacturers are working from.)

The most interesting question is whether PS3 will now have a more cannibalistic effect on standalone Blu-ray sales or less of one. 

The thinking goes like this: PS3s used to be the cheapest way to get a Blu-ray player, and it also happened to play games. However, now that Blu-ray standalone players are so cheap, that is no longer the case. Is it possible that people will postpone PS3 purchases in favor of a $199 Blu-ray player, thinking they can upgrade to the PS3 when the economy improves? or will they instead go from standalone players, spend a few extra bucks to get a PS3, and pat themselves on the back for getting a system that can do gaming and video?

I doubt either will occur, actually. Instead, people in the market for the PS3 will still get one, possibly with fewer accessories, but they weren’t in the market for a standalone player anyway so the effect is not cannibalistic. People in the market for a standalone Blu-ray player will do one of two things: either move downmarket to a $199 or $229 model or just postpone the purchase for next year, assuming that prices will only go lower. In the meantime, the upconverting DVD player they bought last year for $50 will do them just fine.

What are you going to do? Did you plan to buy a Blu-ray player or PS3? What will you do now?

Do you watch video on your Xbox 360 or Sony PS3?

October 21, 2008

In the recessionary spirit, I’ve been thinking through all the ways to get video to the living room and trying to decide which ones are the most economical. The Netflix/Roku box, at $99, is a solid option that performed well in my report at Forrester, but it’s only a piece of the home entertainment puzzle. 

Enter the videogame console. This is a trojan horse — in theory, these gaming systems end up in millions of homes and then one day, people wake up and find that they can also use them to watch DVDs or Blu-ray discs, and that they can download or stream video. Cool, right?

Could be, but isn’t yet. I recently spoke on a panel with the head of home video for Warner Brothers who shared research with the audience about how Blu-ray disc purchases (or attach rate if you want to be nerdy) for people with standalone Blu-ray players are twice as high as they are for PS3 owners. In other words, people with a PS3 are only half as into the Blu-ray player they have compared to other Blu-ray owners. 

The point I’m making is that videogame consoles are game machines. Period. All the other stuff has yet to catch on. Yet. What will it take to change that?

I recently sat down with Shane Kim, Corporate Vice President, Strategy for IEB at Microsoft to talk about the Xbox 360’s upcoming UI refresh, slated to hit November 19. Together with Christina DeRosa, General Manager, Xbox LIVE Marketplace, the two answered some of my questions about the future of video in the Xbox 360 world. Here’s what I learned:

  • Roughly 14 million Xbox 360 users are Xbox LIVE members, 30% of whom have downloaded or streamed video, whether for free or pay. 

That’s a good number — it means nearly 5 million people, far more than have an AppleTV or even a TiVo. My assumption, which I shared with them is that those 30% will spend no more than a third of their time and energy on video vs. gaming in Xbox live. Like good soldiers, they would neither confirm nor deny my assumption, but that means at most, 10% of content flowing over the net to the Xbox is video related.  

  • The entire online revenue for Xbox LIVE, including Xbox LIVE Marketplace, has topped $1 billion since its inception.

Apply my maximum of 10% to that $1 billion and it suggests a ceiling of $100 million in downloads and rentals sold via the Xbox 360. This is complete back-o-the-napkin modeling so don’t hold me (or them) to it. This makes Xbox the #2 digital download store next to Apple iTunes, though the Jobster has a comfortable lead if my estimate is close.

I’ve watched video on my Xbox 360, spending time with the HD version of Hunt for Red October. (A classic, btw, I always live for the moment where the Russian dialogue changes to English on the word, “Armageddon.” Powerful.) But I haven’t done so recently. (The house is in the middle of a remodel so I haven’t done the Netflix/Xbox 360 thing yet, but when I do I’ll blog about it.)

Tell me what you think: have you watched video on the Xbox 360 or on the more recently video-enabled Sony PS3? If so, what do you think? If not, why not and would you ever?