Technobabble: PlayStation 3 price drop unlikely to boost Blu-ray

  • Article by: RANDY A. SALAS , Star Tribune
  • Updated: August 24, 2009 - 5:26 PM

Owners of the game system have been slow to adopt the format.

A new PlayStation 3 is on display at a news conference in Tokyo, Japan, Wednesday, Aug. 19, 2009.

Photo: Itsuo Inouye, Associated Press - Ap

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Many people in the industry are expecting a boost in Blu-ray sales after last week's long-awaited price cut of the PlayStation 3, to $299. After all, the PS3 has been touted by many (including me) as being the best Blu-ray player on the market, and now its price is more in line with many stand-alone players that can handle the high-definition disc format.

So the thinking makes sense, right? Well, maybe.

Despite the PS3's previous higher price and its third-place status among video-game consoles, Sony's flagship system does have a decent installed user base -- about 24 million worldwide, including roughly 9 million in the United States. With stand-alone Blu-ray players totaling an additional 2 million in the United States, according to estimates, the PS3 is by far the most popular Blu-ray player.

But that hasn't translated into a Blu-ray bonanza.

Yes, Blu-ray sales have been steadily increasing, up 91 percent in the first half of the year over 2008, according to the Digital Entertainment Group. That's impressive only until you look more closely at the numbers.

Blu-ray sales in the first six months of 2009 totaled $407 million, which is still about 1/20th of the total sales for the declining DVD format over the same time frame. And as I noted a few months ago, during the first quarter, fewer than one Blu-ray title was bought on average per home with a Blu-ray player, including the PS3.

In fact, with roughly 11 million U.S. Blu-ray households and a reported 40 million Blu-ray titles sold to date, according to the DEG, fewer than four Blu-ray discs have been bought per Blu-ray household in the format's first three years. That's no way to sustain an industry.

On top of that, the average number of discs per household is surely skewed toward the 2 million stand-alone Blu-ray players, because their owners bought the devices solely to play the high-def discs.

Translation: PS3 owners are buying video games, not Blu-ray discs -- so far.

Will that change now that the PS3 is $299, along with the introduction of a slimmer model for the same price? The price drop surely will attract a more mainstream audience. But if the hard-core fans who already have a (higher-priced) PS3 aren't buying Blu-ray, why would more casual gamers do so? On the other hand, maybe people who have targeted the PS3 as an all-in-one home-entertainment player -- not just a video-game system -- will come aboard and start getting into Blu-ray.

There are other things that could sway things in Blu-ray's favor: Toshiba, once the backer of a rival high-def disc, recently announced that it will start making Blu-ray players, which will boost competition. Prices on basic Blu-ray players have dropped below $100. And some Blu-ray discs have been on sale in stores for as low as $10. So maybe the total effect will bring a Blu-ray boost.

But the PS3 price drop alone? Maybe not so much.

Randy A. Salas • 612-673-4542

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