Finally, Blu-ray and HD-DVD are in a fight to the death. Last year, when I learned that Blu-ray would ship with the Playstation 3, which had a market potential of over 30 million units, it was easy to call it the early winner. But as additional facts came in on price, availability, and technical problems, this situation changed. HD-DVD Xbox 360 accessories are selling very well and we may be able to call it the market winner shortly as a result.
Xbox 360 - What a difference a year makes
As we mentioned last week, the Xbox 360 is the most mature of the new generation of gaming platforms. This gives it a massive advantage in terms of available games and accessories. It also gave it a massive advantage in terms of available units. Early numbers (Black Friday, Cyber Monday) suggest that even though both the Nintendo and the PlayStation 3 could have outsold it, manufacturing limitations kept their true potential from being reached. In addition, parents who can't get either of the constrained systems are now apparently shifting their buying behavior to the system they can buy, the Xbox 360 - rather than giving their kids an IOU or paying excessively high Ebay prices.
This showcases the importance of actually having a hot product available in sufficient numbers when the buyers are ready to buy. Because of shortages of the Xbox 360 last year, both Sony and Nintendo got a little pop, while Microsoft could have sold more than four times the game systems it had in supply last year.
A year later, Microsoft has plenty of supply and the other guys are constrained. And, according to early information, Xbox 360 sales are ramping sharply, indicating that it will be the clear winner in terms of installed systems. This fact is critical as game developers are not religious about systems. Generally, they prioritize their efforts based on the number of potential customers in a given market. If Microsoft has several millions more of these potential users, they will get the cream of the games coming out from independent developers. And it is the games that make or break a system.
No matter how you look at it, this has all the earmarks of a solid win for Microsoft in the gaming space.