Why Microsoft Won't Have Blu-ray on the Xbox

Ian Lamont writes "Ever since Toshiba stopped production of HD DVD players, many Xbox 360 owners have been wondering when Microsoft will offer some sort of Blu-ray option for the Xbox 360. The answer: Probably never. Microsoft's product manager for the Xbox 360 has told Reuters that Microsoft is not in talks with Sony or the Blu-ray Association. Why not? The Industry Standard points to HDi, an obscure Microsoft technology that was part of the HD DVD interactivity layer. HDi may be dead on physical media, but it could potentially be applied to other Microsoft HD-compatible technologies such as Xbox Live Arcade and Windows Media Center, and be part of a long-term play to own a big share of the market for HD content delivered over the Internet."

Doesn't make sense

Profit is profit is profit is profit, so why would they not take the opportunity to have an overpriced blueray disc player accessory for the 360? Doesn't seem like sensible business practices to me.

Re:Doesn't make sense

Development costs, testing costs, update costs (look how many updates the Blu-Ray player on the PS3 has received), shipping costs, inventory costs, shelf space costs, etc.

I always figured that MS rushed the 360 HD-DVD so that they could have something out there to help counter the Blu-Ray install base generated by the PS3. Something to give their HDi some installed base to compete with the Java on Blu-Ray.

It doesn't surprise me at all that they wouldn't make a Blu-Ray drive. Even without that point, an HD drive doesn't add to the console's value as much as it did when all players were $600+. As players get cheaper, the reason to buy the add-on over a stand along player drops.

Re:Doesn't make sense

You're right. Profit is profit. The simplest answer is that having a Blu-Ray drive available for the Xbox 360 is simply not profitable. The initial HD DVD drive sold relatively poorly. I believe sales were about 500,000. There's no reason to think a Blu-Ray drive would sell any better.

Sure, it makes them money, but it doesn't make them enough profit. Otherwise, they would've done it.

Re:Doesn't make sense

But their standard is completely dead now it seems, and to keep pushing for it is incomprehensible.

HD-DVD is indeed completely dead, and Microsoft has stopped manufacturing the HD-DVD add-on (more correctly they no longer Toshiba to make it for them). Microsoft knows that HD-DVD as a physical format is dead.

However XBox Live! isn't dead, nor is traditional DVD. The former has great future potential (it, and similar services like iTunes movies, aren't something I'm interested in because the bitrate is going to remain far too low until the end-to-end infrastructure of the internet is dramatically improved, but it's good enough for a lot of people), and the latter is easily good enough for most consumers.

So no, their "standard" isn't dead. DVD is easily going to be dominant until the next generation of game machines, possibly even to the one after that. And then there comes a point where optical media doesn't even matter anymore.

Really this is all rather silly. Microsoft barely supported HD-DVD. Why do people think they're going to rush and support Blu-ray, especially given that the technical requirements of Blu-ray guarantee that such an add-on would be very pricey: How can you compete with Sony that is already selling a full game machine with Blu-ray at less than the cost of a competing companies stand-alone, no-game-machine-included players.

Re:Doesn't make sense

But their standard is completely dead now it seems, and to keep pushing for it is incomprehensible. I mean, they have to be more intelligent than that, right?!

The fact that they lost this one does not mean they will be willing to chance the loss of their position in the market with Windows. They exist only because Windows exists and believe it or not, Blu-ray is a platform threat to Windows. Also remember that Microsoft only "supports" products which are Windows platform lock-ins. They tolerate others doing things on their platform only until those vendors products become a threat or start enabling capabilities on other platforms. One thing about Blu-ray Microsoft despises is its menu system is implemented in Java and every Blu-ray device ships with embedded Java in it.

Check this out and look for the word "pawn" in it:
http://antitrust.slated.org/www.iowaconsumercase.org/011607/3000/PX03096.pdf [slated.org]

So thinking that Microsoft will do what the market asks and help a potential threat to their existence is asking a very lot of Microsoft. They've never done this without either a way to own or destroy the cross-platform capabilities or a way to force their own product(s) onto the market. Microsoft's profits in a market sector have been traded many many times for protection of the Windows platform. Again, Microsoft exists only because Windows exists and without that, over 60% of the profits go away very very quickly. If Blu-ray is seen as a platform threat, Microsoft will not support it without some plan to eliminate the platform threat. And I think the threat has more to do with Java being the Blu-ray spec than Sony's ownership or creation of the spec. IMO.

I find it hard to believe they think the distribution/network is mature enough to jump on a network distribution mechanism instead. But they may feel that they can slow the adaption enough with disabling or stalling the Blu-ray devices on their platform(s). Xbox is the obvious one because they attempted to leverage it for promoting HD-DVD. They knew they couldn't embed it in the Xbox because the price increase would have given PS3 more leverage. We should soon start to see see how they will try to stall Blu-ray on Windows as the devices start moving to PCs.

LoB

Re:Doesn't make sense

I saw that. I say... wrong. The prices went up. That's economics. There are two resons.

1. The closest substitute good (HD-DVD players/software) is now gone
2. Development

People were pushing the players at a loss (Toshiba, et. all too, from my understanding). Now that the pressure is gone, the prices have moved from the dumping range to the "possibly sustainable" range.

I've seen people complain about the new players being more expensive than the old ones, but that always happens when the new players have more features (BD-Live and all it's costs like Ethernet, flash storage, etc) than the old ones.

They're not "leveraging a monopoly", they are just not competing at/near a loss anymore. You can't leverage a Blu-Ray monopoly, because there is no market share for it right now. DVDs will be the "monopoly" in the video market for a few years yet.

I would not be surprised to find a new coalition of HD-DVD-interested companies form to create a new, open, set of technologies to compete with Blue-ray and bring that rampaging giant down.

Sarcasm: Yes. That worked so well the last time. I'm sure they'll try it again with yet another incompatible format.

Slashdot Polls

I guess the recent poll was wrong then. "who cares" was not the correct answer.

Microsoft going against the Apple trend?

Apple would have called it iHD so Microsoft had to call it HDi

Dibs on PODi and TUNEi!

-> I use my TUNEi to fill my PODi :P

HDi

Can't say I'm the biggest fan of MS technologies, but I will say that I think they did a pretty decent job with HDi (all of the menus, animations, bookmarks and other interactive features on an HD DVD are done using it). I'm sure there are any number of other companies who could've done the same thing, too. But if MS wants to use this technology for downloadable videos, then I'm all for it. It'd be nice to actually have a downloadable video that has menus and chapters and the other niceties that we've grown used to.

Live marketplace

Ummm, because like others have said, the war is not over. Blu-ray discs still have to compete with digital distribution. Even Gates mentioned at CES. They've partnered with quite a few places (One is Disney!) so they will likely pursue downloads through their Live marketplace, including HD content before trying to license something from a competing console.

Re:Live marketplace

Digital distribution will get killed by the ISP's and their bandwidth throttling in the US. It competes directly with their core content distribution model. Disk is still the high-bandwidth, lowest cost distribution model for 20GB files in the current environment.

Sony's BR 2.0 spec with a hybrid digital-physical model is the best fit.

Re:Live marketplace

I don't think so. The ISPs are not going to want to face Microsoft, Google, Apple, Disney, and Sony. Yes I know that it seems that it is a battle of who can buy the most congressmen but Microsoft, Google, Apple, Disney, and Sony all have deep pockets and they all feel this is a battle they must win.
If need be Google and Microsoft both have the bucks to become the worlds largest ISPs. They both have the technology base and the motivation if the ISPs get too nasty with them.
Also the cable companies are hated. They are hated by the public at large. Congress know this so it may be a battle that they are willing to take on since Microsoft, Apple, Google, and Disney's money is just as green as Comcast's.

Re:Live marketplace

Digital dsitrubution is NOT a competitor. It is for reneted or short term materials, but lets face it, if my choice is to save $5 or less to download a movie instead of buying the hard copy, or risking loosing the media and also incurring the cost for it's storage.

With physical media I:
- can easily loan it to a friend or family member, without wasting blank media or time to burn it.
- can move it from system to system in seconds, not hours over a network connection
- don't need systems to be compatible for steaming or sharing, a BD player in each room costs about the same as (and will cost less than) the equipment to connect the TV to the network for streaming HD.
- Can make electronic copies for backup (wether currently legal or not)
- can move it off my hard drives at will without buying media and wasting hours (days) to burn it (If I want to encode it on the computer I can, and in less time than burning a DVD...)
- don't have to buy bigger and bigger hard drives and RAID system as my collection grows
- don't have to wait DAYS for Antivirus scans to complete, or copying to new drives as my old ones fill up.
- don't have to back it up

Digital distribution works fine for music, for which I can have tousands of songs on cheap hard drives, and streaming works great over even the cheapest wireless devices for stereo surround audio. It's easy to maintain and copy when your whole collection is less than 100GB (and that's a BIG collection). When a single HD movie is 20-50GB, it's not easy or cheap to maintain my own collection electronically. heck, even standard definition DVDs are hard to maintain on a sharing network.

On-demand video? yes, digital downloads may very well replace Blockbuster. If an all-you-can-eat subscription was available (netflix size library, digitized in HD, and available to start playing within 5 minutes) and the fee was equivolent to current subscription fees ($15 per month) it might become feasable, but you still can't take it with you unless you download the entire movie before leaving... When I go on vacation, or to a friend's house, I want a few dozen good classic movies with me, and a few new ones to. Even at over 8MB downspeed, I'm looking at typing up my pipe for days to download a weeks worth of movies, and hundreds of GBs to store them on. Also, my laptop, even if it had that much storage, doesn't plug into most hotel TVs...

Digital downloads are strong competition for HBO and other networks. Why pay $12/month per channel when you could pay $20/month and see every movie your hear desires on demand? This I see is where digital downloads will make their mark. They're obviously competition for the rental industry, provided the set top box is part of a service and not several hundred dolars by itself.

The best solution in my mind? ...best of both worlds. A set top DVR that can record and play back live HDTV, integrates on on-demand service allowing both per-purchase options as well as monthly all-access subscriptions (hot releases cost a buck or two extra each). Also, instead of a $4 rental, offer a $14 download-to-own option, and for an additional $3 they'll send the original media to you in the mail in a few weeks so you don't have to make backup copies. The set top box should integrate a BD writer so anything you've downloaded (or recorded live) you could burn to your own media. Also integrate it into the network so movies and other content of the DVR can be shared on the network and vice-versa. Also allow an agent to run on a computer so you can not only download movies, but select which PCs they're automatically copied to, like podcasts, so you can keep the most recent, unwatched movies, as well as a few selected favorites, on your laptop and your iPhone without having to copy them there (and waste hours) when you're on the go.

Another reason...

Another reason for not including Blu-Ray capabilities... Like I'd be able to hear the movie?

This isn't a troll. I love my 360, I do. But I've used it to watch DVDs and stream videos from my laptop, and honestly, even in the most well-ventilated of spaces, the console is just too loud for me to enjoy it as a media center at all.

My Slashdot Biases Are Colliding

Sony vs. Microsoft. I guess Slashdot is going to have to go with Sony. We have been triangulated.

Re:The reason is simple...

So that's why we can't get iTunes on a PC. Oh, wait...

Re:The reason is simple...

Apple just didn't want to miss out on 85% of the computer market. If Microsoft didn't have a near-monopoly, there wouldn't be iTunes for PC.

Re:The reason is simple...

And Microsoft wants to miss out on 100% of the HD movie market? They're not dumb enough to think downloadable content is going to be a competitor any time soon. And if consumers buy separate blu-ray players, they'll buy the cheapest one: the PS3. And that cuts into 360 game sales.

Re:The reason is simple...

But Nintendo has the advantage of having never sold the Wii at a loss. They could put out an upgraded machine right now without having real losses (pro-forma "losses" though)

In other words, they're well positioned to be the first ones out of the gate for the next generation of home theater / video game equipment, and they won't have to worry about figuring out which disk format to back.*

Now, whether they actually take advantage of that position remains to be seen. But they've by no means screwed themselves out of anything with their design decisions regarding the Wii.

* of course, if it takes Blu-Ray as long to overtake DVD as DVD took to overtake VHS, USB thumbdrive movies will be well within possibility. Remember, this jump was a big jump data-wise, but High definition is pretty well defined for the next decade or so: 50 gig is going to be plenty for any storage medium for some time, but it's also going to get much easier to achieve. In that sense, Blu-Ray is a disaster. We should've gone with HD-DVD as an interim format (well, it was supposed to be cheaper), knowing that it would be replaced fairly quickly by something much more durable, storable, reliable, and possibly even cheaper.

Correction!

No monopolist is ever going to support a product from a direct competitor. Plenty of other companies do so. Toshiba, Sony, Panasonic, and Samsung all directly compete in many of their core markets. Yet they also often adopt and support technologies developed by one another. The difference? None of them are monopolies and accustomed to monopolistic control in a market.

Re:Correction!

No monopolist is ever going to support a product from a direct competitor...The difference? None of them are monopolies and accustomed to monopolistic control in a market.

That's just a bit of hyperbole there, don't you think? Microsoft was part of the list HD DVD backers - who's members [hddvdprg.com] contain more than a few direct competitors (Corel competes as directly as possible with Office). Nothing is quite as cut and dry as you're making it out - after all, sony still makes computers that run windows, don't they?

Um, ah, Microsoft and Corel are partners

M$ bought a huge chunk of Corel [geek.com], and probably control the company these days. I'm never seen any analysis of the fallout of this deal, it was a while ago.

Re:Eventually ...

There's absolutely no denying that HD-DVD and Blu-Ray look considerably better than just an upscaled DVD. The question is, are retailers going to be able to convince that there is a big enough difference that warrents a couple thousand dollars to get started, as well as increased prices every time they buy movies.

People sometimes say "well, it worked with DVD and VHS!" That's because DVD was an ENTIRELY different technology...no rewinding, perfect still images, clear and focused slow-mo, chapter selections, extra features, multiple language and audio, etc.

Blu-Ray, even with its "internet enabled extra features", is at its core nothing more than a prettier version of DVD. It's not nearly the leap that VHS to DVD was, and as such I think it's going to be much much harder to convince folks to switch (ESPECIALLY considering how much cheaper DVD is, both for the player and the movies.)

Re:The reason is simple...

No. You can't (legally or easily) load OS X onto your generic or HP, Dell or Lenovo PC. OS X only runs on Apple hardware, therefore it does not compete with Windows in the non-Apple hardware space. Linux does.

I don't think many people buy hardware based upon the binary "Apple or non-Apply hardware?" decision point. OS X absolutely is a competitor to Windows, regardless of whether it implicitly binds additional decision points.

Re:So when you want Blu-ray content...

It makes perfect sense if you realize that the PS3 is the only really future-proof Blu-ray player on the market right now. That, and the fact that it's almost the same price as a stand-alone player, plus you can play games, media, and install Linux on it.