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Microsoft Responds to HD-DVD’s Defeat
Posted by Nick24444, 174 days ago Feb 19, 2008 20:23

Earlier today, Microsoft released an official statement regarding Toshiba’s decision to cease providing HD-DVD content. In the wake of Toshiba’s decision to stop producing media and hardware which utilized the HD-DVD format, Microsoft respond with their own statement, which appeared on The Gamerscore Blog, which stated that Microsoft felt that “They do not believe the recent reports about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace” as Microsoft’s “Xbox 360 continues to have the largest next-gen games library with the most exclusives and best selling games in the industry.” Microsoft is currently holding discussions of its Xbox 360 HD-DVD accessory until Toshiba has decided where it plans to take itself. In the meantime, Microsoft assured its customers that they will still have “the choice to enjoy digital distribution of high definition movies and TV shows directly to their living room along with playback of the DVD movies they already own. “

It’s clear from this that Microsoft feels that the future lack of availability of HD-DVD production wouldn’t have “any material impact on the Xbox 360 platform or our position in the marketplace,” but there is the potential for a deep impact on one portion of Microsoft’s product line: the HD-DVD player accessory for the Xbox 360. An article that appeared at the DailyTech website today showed that there could be serious effects for Microsoft as, according to data collected by the NPD, the Xbox 360 HD-DVD peripheral has so far resulted in total sales of 269,000, which translates to roughly 3 and a ½ percent sales rate per console, and this ranks the Xbox 360 HD-DVD player as representative of 1/3 of all HD-DVD sales, and Microsoft itself has called the HD-DVD add on its “biggest-selling accessory” for the Xbox 360 console.

Despite the possible effects that the lack of further HD-DVD material for Toshiba could do to sales of this highly valued piece of Xbox 360 hardware, Microsoft continues to be quite sanguine in its belief that Toshiba’s decision will result in no real damage to the sales of the DVD player accessory. One possible reason for this is the positive reaction to Microsoft’s plans to create a Blu-Ray Disc adapter to the Xbox 360, which would allow owners of the next-gen console to utilize both Blu-Ray and HD-DVD formats with their Xbox 360’s, which is an idea that has received positive feedback from Sony.

According to Michael Ephraim, the managing director of Sony Computer Entertainment Australia, Sony would cheerfully welcome Microsoft’s inclusion into the list of firms that use the Blu-Ray format. “We would welcome Microsoft to the Blu-ray stable,” Ephraim was quoted as saying, before going on to add that he believed it was “quite logical for them as the PS3 has been very successful in driving consumers to Blu-ray. In fact, we believe that it has done more to win the format war than traditional Blu-ray player.”

Microsoft, however, kept its cards close to its chest when it offered the comment that “it is premature to speculate about Blu-ray but we do know from market data that HD movie playback is not a primary purchase driver for consumers buying video game console. It continues to be games that drive purchase and that has consistently been a strong point for the Xbox 360 platform.”However, the idea that Microsoft would eventually decide to make use of the Blu-Ray format across very applications, including the Xbox 360, was not very far from Microsoft’s mind. In fact, at this year’s Consumer Electronics Show, Microsoft’s Corporate Vice President Jeff Bell stated that Microsoft had “been talking to Blu-ray all along because we have the best piece of software in the business, called HDi. It is the backbone that powers interactivity in HD-DVD and we have that available to potentially partner with others.”

Bell’s statement was also backed up by the statements of two other Microsoft employees, Albert Penello (the group marketing manager for Xbox hardware) and Neil Thompson who occupies the position of Senior Regional Director for Microsoft Europe. Penello stated for the record that Microsoft would develop a Blu-Ray disc feature for the Xbox 360 if its customers wanted it. Penello added that Microsoft believed that the decision was a matter of “consumer choice; and if that’s the way they vote, that’s something we’ll have to consider.” Mr. Thompson reinforced Penello’s words which a statement he gave in March of this year which ran as follows: “whatever format wins it is highly likely we will offer a solution. The only debate is if you want to watch Blu-ray movies and pay the extra money for that feature. We prefer to offer the consumer choice.”

See? It pays to roll with the punch.

Prev: What’s Left for Toshiba: The Impact of Toshiba’s Withdrawal Causing Complications
Next: Playstation 3 Powerhouse Pummels HD-DVD

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