As noted in a previous blog, video discs in the Blu-Ray format have been experiencing a sales surge likely driven by the release of the PS3 with its included Blu-Ray player. That doesn't speak to strong sales of the PS3, however, so much as paltry sales of dedicated players for either format. The fact that Sony PS3 sales have managed to make a dent in HD disc sales is a byproduct of a slow start for an HD disc format driven by consumer reluctance to pick the wrong side in a format war.
Sony likely hopes that Blu-Ray's turnaround might help to pull PS3 sales figures upwards. What if, however, the reverse happens? What if Sony's inability to drive more sales of the PS3, plagued as it is with high prices and, now, a hardware change that is leading to lower levels of backwards compatibility just in time for the PS3's European launch, causes the Blu-Ray surge to be unsustainable? The PS3 is, at its heart, a game console, irrespective of whether Sony hoped to turn it into a trojan horse for their video disc format.
I've discussed previously the risks associated with Sony bolting its game console and Blu-Ray futures together in the same device. Blu-Ray's failure as a format would certainly weigh on PS3 success and make it an expensive distraction, but PS3's status as a game console wouldn't be terminally affected. PS3's failure as a game console, however, would have more serious ramifications, as it could reverse recent gains as people start to favor XBOX or Nintendo consoles over the PS3 console.
Microsoft is working hard to bring titles formerly exclusive to the Playstation to the XBOX, which combined with its lead in game selection can only cement its position vis a vis Sony. The XBOX team, however, also appears to be trying to erode the relevance of an HD disc format to game consoles using its successful XBOX Live service, a point made by someone using the handle "issor" in an article on Ars Technica regarding the soon to be released upgrade to the XBOX 360:
...I think MS has made a strong stance that their objective is to provide the same functionality through XBOX Live. The question is whether someone finds similar value in having the capability and environment(availability) to download HD content and play it as they do being able to rent or buy a Blu-ray movie and watch it.
XBOX movie rentals are currently limited (there were approximately 120 movies available last I checked, not sure about the number of TV shows), and you can't make a permanent purchase at all, but how long before Microsoft rectifies that? Will Microsoft at some point make it possible to burn a permanent copy of an HD movie downloaded through XBOX Live? It's an interesting possibility, and rumor has it that Microsoft also makes computer operating systems that might serve as a delivery path for such functionality.
Adding to pressure on the PS3 are the incredible sales of the Nintendo Wii. The Wii has been the top selling console for several months, and has managed to find customers in unexpected locations, such as retirement homes (bowling is popular), as well as driven certain kids in small towns in Colorado to freeze themselves in anticipation, only to awaken in a "Buck Rogers" inspired future where intelligent beavers battle warring clans of humans over who best exemplifies atheistic principles (okay, that last bit was from a "South Park" episode).
The net result may be that Sony's recent gains in the HD disc format wars might be like climbing a pudding mountain. Sony has managed to scramble far enough up its slope to reach parity with HD-DVD, but staying there is hard to do while weighed down by the PS3's lukewarm reception among gamers.
Yes...a pudding mountain.