So Sony (NYSE:SNE) have won the format war for HD TV content distribution. The Blu-Ray disk has beaten HD DVD to become the new standard. The first Sony media victory since the Microfloppy of 1982.
But it has cost Sony dearly. Difficulties mass producing Blu-Ray drives in 2005/6 delayed the PS3 getting to market. And when it did, the high cost of the drives compared with DVDs contributed to Sony having to charge a premium price for the console, which stunted sales. These factors may possibly result in Sony coming third in this generation of the console wars. For certain, they haven’t dominated like they did in the last generation with PS2, a very high cost to pay.
Meanwhile Microsoft (NASDAQ:MSFT) did not build an HD drive into the Xbox 360. This enabled them to get their console to market more quickly and for a lower price. So they have maintained a significant lead over Sony in this generation of console. By having the HD drive as an external add on Microsoft hedged its bets. It didn’t bother them or affect them commercially whichever format won. They would just make external drives using whichever format won. And so they will.
Of course none of this has any impact on Nintendo (OTCPK:NTDOY). They, quite literally, are playing a different game.