Gaming Pushing Blu-ray/HD DVD Market, Research Finds

Gaming hardware is driving the adoption of both Blu-ray and HD DVD, according to new research from DisplaySearch.

According to "Quarterly Global Next Generation DVD and Game Platform Hardware Shipment and Forecast Report," which is set to be released at the end of the month, high-definition DVD gaming hardware -- Sony's PlayStation 3 and Xbox 360's external HD DVD drive -- had revenue growth of more than three times that of standalone players from the second to third quarters of 2007.

"Due to consumer price sensitivity and satisfaction with regular DVD in North America, the substantial growth needed for Next Generation DVD to grow beyond a niche market dominated by consoles will require time, persistence, and aggressive pricing," says Paul Erickson, director of DVD and HD Market Research at DisplaySearch.

Overall, game console-related hardware made up 85 percent of global next-gen DVD shipments during Q1-Q3 '07, with North America accounting for 80 percent of total next-gen DVD shipments (including gaming hardware).

Not surprisingly, Sony dominated the total Blu-ray market, with 97 percent worldwide share thanks to the PlayStation 3. "It's played a very important role," Andy Parsons, chair of the U.S. promotion committee for the Blu-ray Disc Association (BDA), told me at CES.

"That's certainly been a foundation of the Blu-ray format."

In terms of standalone players -- not including the PS3 -- Toshiba accounted for nearly 64 percent more than all available Blu-ray brands combined between Q1 and Q3 ’07.

Between Sony, Toshiba and Microsoft, which manufactures the external HD DVD drive for the Xbox 360, these three companies accounted for 98 percent of global next-gen DVD hardware.

"The market for Blu-ray Disc and HD DVD continues to grow, but our research continues to indicate that this market will face challenges not only in capturing mainstream sales, but also in expanding beyond a hardware ecosystem dominated by primarily only three companies," says Erickson.

"This is expected to be a dynamic that will persist regardless of whether the market consolidates around a single format, or continues onward with the status quo.”

Of course, all of this information looks at a time period before Warner Bros., the largest studio supporting both formats, decided to side solely with Blu-ray.

Bill Hunt of The Digital Bits (via Jake West) points to new NPD Group data that shows that, since the Warner announcement, Blu-ray hardware sales -- even without counting the PS3 -- have dominated HD DVD sales.



Find out more about the report here.

This article was updated at 2:05 PM EST to clarify the time period that Toshiba's players accounted for more than the rest of the market and feature information from the Digital Bits.