Blu-Ray vs. HD-DVD: The Microsoft Conspiracy Theory

This article was funny enough that I had to share.

Engadget: Michael Bay’s format war conspiracy theory: it’s a Microsoft fix

Here is a tidbit:

Responding to a commenter angry over Paramount’s decision to burn Optimus and friends onto HD DVD only, Bay claims to have the inside track on the “corporate politics” at play here, suggesting that “Microsoft wants both formats to fail so they can be heroes and make the world move to digital downloads.” He goes on to claim that Redmond has only been financially backing HD DVD over “superior Blu-ray” to create “confusion in the market” until such time as high def digital downloading goes prime time.

I love it. This is fun stuff, if you are into meaningless format wars.

Truth be told, Blu-Ray should be king of the hill by now. HD-DVD was almost knocking on death’s door based on studio support, with most studios either deciding to support both or just Blu-Ray. That would have killed HD-DVD quickly, since a typical consumer would have just said, “buy the Blu-Ray, and get access to all movies”. This is on top of the fact that Blu-Ray offers higher storage capacity, and had early support from PC manufacturers like Apple. (Yes, I know the Blu-Ray players cost more, but I assume that problem gets solved quickly)

HD-DVD managed to prevent this fate this year by paying literally a $150M spiff to Paramount and Dreamworks to make their movies HD-DVD only. That pulled Shrek & Transformers into the “must have HD-DVD camp”, and thus the war rages on.

I could have some sympathy, as a result, for Bay’s theory, except for the fact that if there is any subsidy war in this market, Sony takes the cake. They are subsidizing a Blu-Ray player into every single PS3, plus some free movies, in order to get the expensive player technology into the market. That may not be $150M spiff, but it’s actually far more dollars when you assume hundreds of dollars of losses over millions of PS3 boxes.

Microsoft could have done the same with HD-DVD in the Xbox 360, but they chose not to, and made it an add-on product.

In any case, you can put me in the Blu-Ray camp. The minute the spiff runs out, Paramount & Dreamworks will rush back to Blu-Ray, and PS3 growth in 2008 should start to move the right direction. People want to buy movies, and as HD becomes the standard, they will demand high def DVD products. I wish I could promise you that iTunes will have an HD TV & Movie solution in 2008, but I think the big studios are running neck & neck with the music companies in trying to fight their customers instead of giving them what they want. (Right, NBC?)

Update (12/5/2007):  Ugh.  Engadget has an article today quoting an analyst projecting no end to the format war.  Stalemate.  Some of the comments make a case for cheap HD-DVD players and dual-disc production in China turning the war in HD-DVD favor.  I hope not.

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