Rich Fiscus
6 Nov 2007 10:40
Last week, at the Blu-ray Disc Festival in Los Angeles, 20th Century Fox president Mike Dunn took shots at a company he characterized as an 800 pound gorilla looking for customer confusion to spark online media sales. It was a thinly veiled reference to HD DVD supporter Microsoft, and later in the week a Microsoft representative responded, saying “The [Blu-ray] camp’s claims about Microsoft’s desire to have a format war are baseless.” Kevin Collins, director in the Microsoft Consumer Media Technology Group said ”Microsoft has over 100 people working on HD DVD interactivity and we believe that HD DVD is the next-generation optical format.”
Collins said the company's decision to back HD DVD was a result of purely pragmatic concerns such as lower disc manufacturing costs and mandated managed copying, which is supposed to make it possible to exercise some fair use rights without compromising DRM concerns. On the subject of copying, he said “AACS today is rapidly approaching the ‘final agreement’ that will start to make this available for customers, though I do not have a firm timeline on this.” He added, “The key fact is that Microsoft believed that a next-generation format should be ‘consumer friendly’ and at the time of the decision, only HD DVD supported this.”
He also addressed the decision not to make HD DVD a standard feature for the Xbox 360. “If you look historically at the attach rates (i.e. the number of DVDs purchased per DVD player) you will see that game consoles have a single-digit attach rate, while dedicated DVD players have an attach rate in the mid-20s,” said Collins. ”Microsoft knew if we put in an HD DVD drive that we would have to raise costs and disenfranchise our customers (that are primarily gamers) as the unit would become too expensive.”
To illustrate this he pointed out the sales gap between Nintendo's Wii, which debuted at a significantly lower price than either the Xbox 360 or PS3 (and has no next-gen media support) and subsequently outsold both by a considerable margin. Microsoft recently introduced a bare bones version of the Xbox 360, called the Arcade Bundle, to close the price gap with Nintendo.
Source: Home Media Magazine