XBOX 360 and HD-DVD

XBOX 360 and HD-DVD

Summary: In a recent discussion, a friend wondered why Microsoft had opted not to include an HD-DVD drive in the recent update to the XBOX 360 console (the XBOX 360 Elite). The logic would seem obvious.

TOPICS: Microsoft

In a recent discussion, a friend wondered why Microsoft had opted not to include an HD-DVD drive in the recent update to the XBOX 360 console (the XBOX 360 Elite). The logic would seem obvious. In the US, 94% of Blu-Ray players sold are included as part of the PS3 game console. This has led to a situation where more Blu-Ray players are sold each month than HD-DVD players. By including an HD-DVD player in the XBOX 360, wouldn't that help to provide the same push behind the HD-DVD format that Blu-Ray is currently experiencing from PS3 sales?

Perhaps, but I can see a number of reasons for Microsoft to hold off on such a move. There is a lot of risk in Microsoft hitching its game console horse inextricably to one of the HD disc formats. Though Microsoft has made clear what disc format they would prefer, that's different than taking economic risks to ensure it happens.

A failure of the Blu-Ray format would negatively affect PS3 sales (though I would argue that the PS3's failure as a game console is more dangerous, explained later). Why would Microsoft want to put itself in the same "all-or-nothing" bind by hitching itself to HD-DVD? Better to keep HD disc support an external add-on, providing Microsoft the opportunity to offer a Blu-Ray drive should the need arise.

Inclusion would add considerably to the cost of an XBOX. Currently, the XBOX 360 has a cost advantage over the PS3, largely due to its lack of reliance on the HD disc playback technology. This is important given that large percentages of game console owners have yet to purchase an HD TV set, but is particularly important in a market that has proven extremely cost sensitive. Though the Nintendo controller is clearly innovative, it doesn't hurt that a Wii is a relative bargain at $250.00. PS2 sales continue to be strong, driven in no small part by the fact that it costs only $129.00.

Avoiding a final decision on HD disc format makes all the more sense when you consider Microsoft has no horse in the HD disc format race. Granted, Microsoft was involved in the creation of iHD, the XML format used to create the interactive content on HD-DVD discs, but that hardly constitutes a reason to risk the XBOX franchise on an HD disc format. Sony owns the Blu-Ray format, and though I question a decision to put so many eggs into the PS3 basket, their complete devotion to one format in the battle makes sense given the direct financial benefits they would derive from Blu-Ray success. That doesn't apply so much to Microsoft.

Last, Microsoft would vastly prefer a downloadable media model to one oriented around physical discs. I love XBOX Live's movie download service, and though I find it maddeningly short on selection (130 movie titles at last count), the concept is spectacular. Microsoft would prefer that people buy their movies as downloadable content, and later, even their games. That makes the marginal gain from helping HD-DVD win the battle even less important, given that their real goals lie elsewhere.

Things might have been different if it was clear that one format had decisively won the battle. Though PS3 has driven a surge in the Blu-Ray format, the success of the trojan horse gambit is far from assured, given that it is entirely dependent on sales of the PS3. Again, 94% of Blu-Ray players sold recently are included as part of the PS3.

It's highly unlikely that most people are buying PS3's to play their Blu-Ray movies. That means the success of the PS3 depends on its strengths as a game console, and in that arena, it has not been faring as well. PS3's ability to continue shipping Blu-Ray players in those numbers is dependent on the PS3's ability to continue to attract consumers as a game console.

Likewise, around half of HD-DVD players were purchased as standalone players. Granted, the other half was entirely the HD-DVD add-on offered for the XBOX 360, but those buyers can be expected to be buying the player because they want to watch HD-DVD movies, as it adds nothing to game play.

Last, the production cost advantages of HD-DVD still seems to be running strong, and appears to have played some role in HD-DVDs success in Europe (though the PS3 was only recently released in that market, so it remains to be seen whether HD-DVDs lead is sustainable):

Production costs are also of importance to smaller studios which may not be willing to purchase entirely new equipment in order to press Blu-ray discs, or incur substantially higher costs to produce them. French replication company Qol CEO Laurent Villaume told FT that the risk involved in producing Blu-ray disks isn't comparable to that of HD DVD: "An HD DVD replication line costs about €800,000 and you can make 40,000 discs a day on it. A Blu-Ray replication line costs €1.7m or €1.8m and you can make 10,000 to 15,000 discs a day."

There also seems to be some interest in that mandatory ethernet port on HD-DVD players (something which is optional on Blu-Ray players):

The HD DVD standard requires players to have an Ethernet jack and European studios feel that they could take advantage of this to offer extra content to HD DVD players over the Internet rather than on the discs themselves.

The European launch of the PS3 might change things on the continent, but as things stand, three times the number of European films are released on HD-DVD versus Blu-Ray.

The PS3 has put new wind to the Blu-Ray formats sails, but it hardly seems to have blown away the advantages of the HD-DVD format.

Topic: Microsoft

John Carroll

About John Carroll

John Carroll has delivered his opinion on ZDNet since the last millennium. Since May 2008, he is no longer a Microsoft employee. He is currently working at a unified messaging-related startup.

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  • Corrections

    It is HDi not iHD. It is HD DVD not HD-DVD. It is Blu-ray Disc or BD nor Blu-Ray or BR.

    There is a technical reason Microsoft could not include the drive in the Elite. Xbox games are DVD9 and require a DVD 12x drive to work. Currently HD DVD drives are 1x speed.
    glocks out
    • Regarding corrections

      Pretty sure it's iHD...for an example link:

      As for HD-DVD versus HD DVD, perhaps (I've seen it both ways on the net), but then I can't talk about HD DVDs separate from the HD DVD, like Blu-Ray, I hyphenate (and most articles I've seen use Blu-Ray).

      Tom-ay-to, to-mah-to...

      [i]There is a technical reason Microsoft could not include the drive in the Elite. Xbox games are DVD9 and require a DVD 12x drive to work. Currently HD DVD drives are 1x speed.[/i]

      An HD-DVD drive could easily support standard DVD, and then could support 12x speeds, even if it doesn't spin as fast as might be necessary for HD-DVD playback.
      John Carroll
      • Make that...

        An HD-DVD drive could easily support standard DVD, and then could support 12x speeds, even if it doesn't spin [b]that fast[/i] for HD-DVD playback.
        John Carroll
      • Re: corrections

        Blu-ray does have a hyphen, but the R is not capitalized.

        HD DVD does not have the hyphen

        What I meant about the technology is that current drives can't handle it, they would have to create a new drive and that would take time and loads of money.
        glocks out
      • HDi v iHD

        Microsoft calls it HDi
        glocks out
        • So they do...

          Perhaps it's a general confusion, as most articles seem to use iHD. Maybe that's because of a trend towards things named started with an i (iPod, iPhone, etc.), a trend I'm sure Microsoft wants to separate themselves from as much as possible...
          John Carroll
          • It used to be iHD but they changed it (nt)

            glocks out
  • ...advantages of the HD-DVD format.

    "The PS3 has put new wind to the Blu-Ray formats sails, but it hardly seems to have blown away the advantages of the HD-DVD format."

    What advantages might that be?

    Things HD DVD has that Blu-ray does not: mandatory ethernet; mandatory TrueHD decoding; similar physical structure as DVD; first to the market, HDi XML based interactivity.

    Things Blu-ray has that HD DVD does not: higher storage; higher bandwidth; extra scratch resistant surface; BD-J Java based interactivity; more manufacturer support (players are available from Toshiba, NEC, LG (does not bare HD DVD logo), RCA (they discontinued their model) versus Panasonic, Pioneer, Philips, Sony, LG, Samsung); more studio support (Sony/Columbia/Tristar, MGM/UA, Fox, Lionsgate, and Disney/Buena Vista/Pixar versus Universal and Weinstein - Warner, Dreamworks and Paramount are neutral).

    This isn't even taking into account the sales numbers which have been shown to be 4.5:1 in favor of Blu-ray over the last few weeks and almost 2.5:1 YTD.
    glocks out
    • You missed lower costs

      HD-DVD is still lower in cost, both from a manufacturing standpoint (as noted in the blog) and from a player standpoint. That scratch resistant surface, by the way, is more necessary in Blu-Ray because of the thinner coating. If it didn't have that, Blu-Ray discs would become damaged a lot more easily.

      Not denying more hardware manufacturers and studios support Blu-Ray (now). In the pre-PS3 horse race, however, HD-DVD came out ahead.

      Of course, we now live in the post-PS3 era, and that might change things. That's another reason why committing to an integrated HD-DVD drive would have been premature for Microsoft.
      John Carroll
      • Consumers

        The new customer is the consumer.

        Microsoft would like to repeat their coup of the PC industry. The method is the
        same. Subverting the open market by replacing it with "platform". Move
        competition into a walled city. This psudo economy requires broad support. It it
        needs to cannibalize the real market to get it. This just isn't happening anymore.
        The decisive sweeping victory of one platform over another is no longer what's

        Consumers are the new arbiters of taste. Manufacturers or developers or OEMs are
        no longer effective mouthpieces for the Microsoft message. Reductive thinking is
        not helpful. If the XBox 360's leverage is catalogue and price, how does the PS2
        not register with you? How is XBox 360 somehow the sole custodian of the
        download? How does PS3's free online basic package somehow not count? Why
        should a consumer care what manufacturing costs are if they get more for the
        same price? How is it that someone can't have 2, 3 or 4 reasons for purchasing a
        console, not just one.

        There seems to be an ongoing urgency to map Microsoft's path to industry
        dominance. Even in this new environment of open market choices, there seems to
        be a need. Why? I think it's because Microsoft fears open market competition. We
        see financial failures in all areas except Windows and Office. We see massive
        failures of Zune, an open market initiative, when the old tricks (Plays for Sure)
        didn't work.There is now a new template that enlightened consumers look to for

        The most flagrant example of the differing strategies is exemplified by XNA vs
        Little Big Planet, and Home vs XBox Live. A new generation of tools makes the
        consumer the developer. It's a inevitable extension of technology. The jury will be
        out for at least 18 months. We'll see if inspiring creativity proves more effective
        than pandering to it, purchasing it, bribing it, and hoarding it.
        Harry Bardal
      • Missed that

        There is a slight advantage in price. Players are sold for within a couple hundred dollars, and this is of course shrinking. Funai, Lite-On and Sony are all introducing low cost Blu-ray players this year.

        Manufacturing costs

        The hard surface is necessary, but it's also a great feature. Considering HD DVD requires much more tolerance due to the more precise blue-violet laser, scratches should affect HD DVD more than regular DVDs considering they use the same layer depth.
        glocks out
      • pre-PS3

        The pre-PS3 world was also pre-lots of things. There was only one Blu-ray player on the market before October 2006. The rest of the players came out in November/December. The 50GB BD was also released in November. A few of the studios didn't release films until November either, and now they're releasing a lot. So the "PS3 effect" is probably quite exaggerated.
        glocks out
  • Maybe a moot point

    The whole format war may be a moot point if HD player manufactures just decide to include both formats.

    HD DVD vs. Blu-ray could go the way of DVD+R vs. DVD-R.
    • I hope so...

      ...Microsoft would then offer an HD-DVD / Blu-Ray combo drive for the XBOX 360. I bet that would sell a lot of units.
      John Carroll
    • You're right, however...

      If players were universal (as DVD and Divx are now), the studios would not be releasing on both formats still, they would chose which one fits their needs better (sort of how Fox broadcasts in 720p while everyone else is in 1080i).

      If the studios chose Blu-ray, then the war is over. If the studios chose HD DVD, than it is over.

      People are watching Universal because if they go neutral the war ends.

      There will be a dominant software format regardless.
      glocks out
      • If all studios

        [i]If players were universal (as DVD and Divx are now), the studios would not be releasing on both formats still, they would chose which one fits their needs better (sort of how Fox broadcasts in 720p while everyone else is in 1080i).[/i]

        I agree that if [b]all[/b] studios choose one format the war is over and you have a format winner.

        However, right now the studios are divided into 2 camps (a very few doing both). If dual HD players hit main stream then they will stick to the camp they have already invested money in.

        I will stick with my prediction that it will be dual format.


        Go with the poster below that believes both formats are already dead and a new format will usurp them both before they even get mainstream.
  • Its all pointless

    I firmly believe that the majority of People will end up buying a All in One Video Player (DVD, HD-DVD, and Blu-Ray) and the BluRay in the PS3 and HD-DVD for Xbox360 will be pointless for movie playback. It will be just like the DVD capabilities in the PS2/Xbox. Only a handful of people actually played their movies on there because most people ended up getting and using a separate DVD Player for their movies. I know I do not plan on locking myself into one format.
    • That would make the most sense

      I find playback on a game console to be of limited use. If it's the only playback device you have (as is the case with many owners of Blu-Ray, you might use it, but it rarely compares well to dedicated devices...and if that device supports all three formats, why bother with the console.

      Again, that speaks to keeping an HD playback device separate from a game console.
      John Carroll
      • The XBOX 360 is all we have...

        ...connected to the widescreen in our living room.

        Therefore, it is MUCH more than just "a game console" to my family.

        When you combine the 360 Extender capabilities to our Media Center PC upstairs, the HD-DVD player, and Live HD downloads, it makes anything the satellite or cable providers offer seem pretty sad.

        Then, of course, when we get tired of watching movies, TV, our videos, or listening to music, we punch out and play Arcade or any of the 360 games we have or rent. That's something I doubt the satellite or cable companies will NEVER be able to do.

        So, a "next generation" DVD player is something I hope Microsoft continues to offer with the XBOX system moving forward.

        After all, my wife is enjoying the lack of clutter next to the TV... ;)

        Have a great day!
        • I agree (for the most part)

          That is true and I think that is where the market is going. Many people will choose to get their media content digitally via the internet or direct download. With technologies like IPTV knocking at our door I think Movies on Disc will decline just like iTunes and Napster have slowed the sales of CDs. However to get caught in a childish battle between the two formats is just stupid. I guess if you are fortunate enough to have an XBOX360 w/HD-DVD and a PS3 you are in good shape if you don't mind having to use two different media players to watch a movie depending on what format it came on.