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The problems with the Sony (SNE) Playstation PS3 are well documented:

  • It was far too expensive at launch and still is, but less so,
  • Its graphics processor is weak - holding back game quality
  • It is difficult for development - so games, including key platform exclusives, were slow to be released 
  • It had terrible Sixaxis controllers
  • It costs too much to make because of Blu Ray and Cell - leaving Sony no room to maneuver, and
  • Sony management has been sending out conflicting messages which have confused marketing

This is why the PS3 is running third and last for sales in this generation of the console wars.

But Playstation is the biggest global brand in gaming and totally dominated the two previous console generations, so Sony still had a very solid marketing platform on which to build. So this is what it has done. There has been no golden bullet, just steady slog. First, Sony stripped out a pile of capabilities, including backward compatibility, so it could make it cheaper and thus sell it cheaper. Then it started churning out the software with the occasional exclusive like Metal Gear Solid 4, but these have not had the massive effect some were hoping for. There are more big hopes on the way, Killzone 2, Little Big Planet, Resistance 2 and Gran Turismo for instance. And these, once again, will each help a bit.

The biggest boost they have had was from Microsoft (MSFT) with the Red Ring of Death (RRoD). This saved Sony’s bacon. You could see the effect with GTA IV when the 360 version won, but only just, despite exclusive downloadable content and massive marketing. People felt safer buying a PS3 to play this game.

Online the PS3 is way behind with PSN, but it is free. Despite this seeming advantage, there is the downside that it is not sufficiently policed, so it's full of pre-adolescent hooligans running amok. PSN has been successfully updated with Xcross Media Bar. And Home promises to bring social networking to gaming and has the potential to be a massive success. Like Second Life with a purpose. With beta about to start, we will soon be finding out how solid the promise is.

There is a gesture interface coming for the PS3, which is why Nintendo (NTDOY.PK) just upgraded its gesture interface on the Wii to remain competitive. We are promised blockbuster announcements from Sony at Leipzig and this could be one of them. If Sony uses a motion controller to introduce games that appeal to a wider audience, it too could be a massive success. Once again, we will see.

As it is, Sony is now ahead of Microsoft in Europe, partly because Europe easily gets fed up of a diet of shooters and partly because the entrenched Sony brand and territory management in Europe are so powerful. In America, the 360 is well ahead but the PS3 is catching up quickly. This must be Microsoft’s biggest worry and you can see it dropping prices again for the holiday season in order to fight back. In Japan, amazingly, the 360 has outsold the PS3 some weeks. This is a disaster for Sony on their home soil, where PS3 sales have never really taken off, with only just over two million sold to date. Surely a fix for this must be in the works.

So globally we really are on the cusp of seeing if Sony can beat Microsoft this time round. As ever in this industry, it will be fascinating to watch.

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This article has 18 comments:

  •  
    I think that just talling about the fact that Sony may or may not win this gen show how far Microsoft have come. I think if you asked them at the start of this gen if they would be happy to come second to anyone they would have taken your hand off... I feel that the wii has this and that MS and Sony will end-up around the same. The problem with the PS3 is just the lack of games, thats it is a nut shell. I hear all the chat about this and thats but the bottom line is just no good games... I have all three consoles. The Wii is for the kids, the PS3 some times plays Blu-ray from blockbusters and my 360 gets all the games and all the usage. I really tried to get along with the PS3 as I had a PS2 and PS1, but it is just boring I tried MGS4 I sat down looking forward to it, but after about 4 hours I just could stop myself turning it off and looking for something I could replay on my 360... I am not a fan boy or anything like that, games are everything with a "Games console" but Sony have failed me bigtime.....
    2008 Aug 20 07:58 AM | Link | Reply
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    Actually the 360 version of GTA IV from US numbers we have to date outsold the PS3 version by a very comfortable 2-1. Nevertheless the only boost it has gotten from HW this year was MGS4 and then it dropped like a rock the month after as we see.
    2008 Aug 20 08:23 AM | Link | Reply
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    I have a problem with some of the statements in this article. I won't have the time to depict them all but everyone can tell that you are an Xbox/MS Fan.

    Granted Sony tried to do three things with one console. It was a gamble but it has paid off.

    1 - New Processor. The Cell is provoking developers to think differently and other Processing manufacturs are following suit with the whole mutli threading processing. This is also being implemented in PC's, Laptops, and University

    2 - New Media Format. By putting the Blu-Ray inside the PS3 it ensure that it would be the new format over HD-DVD. If MS would have thought the same and put the HD-DVD inside it would have a different outcome to the war.

    3 - Gaming Console. For my standards it has fantastic job. The PS3 does not have a weak process. Please don't base this on multiplatform game comparassons. The frame rate issues are becuase developers are putting in the time to learn. Yes this is a down fall but this is issue is starting to desipate.

    There two reasons why Xbox has more games than the PS3. 1.) it was out a whole year before the PS3. 2.) the developers can't "get their heads around the PS3". Nearly EVERY game coming out is multi-platform, both the Xbox and PS3 are gettig it.

    There are plenty of games out there which the graphics are equal if not better than the 360 (COD4, Devil May Cry, Soul Caliber, GTA, MGS4, RFOM1 & 2). These are games in which the developer took the time to learn the console and produce a very good looking game.

    As far as Online. Yes the Xbox has an advantage becuase ITS BEEN RUNNING FOR 5 TO 6 YEARS. The PSN is only two years old and look where it's at. It's pretty much matching all of the features that Live has with execption of Netflix and some other small things like Voice chating. Hopefully HOME will boost PSN.

    Plus, who really wants to pay extra just to play the game online. You just paid $60 for a game. Now you have a yearly subsription fee to play on-line this is redicoulus. That is just MS Nickle and Diming their consumers. Another example is how LIVE users have to pay for Themes and PIctures. These items are free for PSN users and you have the ability to create your own. Oh yeah, you can also go google.com right from the PS3.

    Though I am not big on the "Adchievements" things, the PSN Trophy system is way better. Not only do you get a Global Gaming Level you actually game cool looking trophies that you can visually compare with your PSN Friends.

    So, my true issue with the article is with the some of the off the wall statements about PS3 which truely don't hold any more as things have changed dramatically in the past two years. Please do some further research before writing any more articles. It helps with credability and the site's as well.
    2008 Aug 20 08:50 AM | Link | Reply
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    Actually you have a couple of other things wrong in this article. By no means is Sony catching up quickly in the US. Per NPD Microsoft has a 5.6 million lead. At the rate of last month it would take Sony 23 years to out sale the 360 in the US. At the rate of just this year it would take Sony 11 years still well beyond this generation. If we look from November 2007 until now Sony would never catch up with the 360. As the 360 has actually grown it's usebase more since holiday 07.

    Your claim of Sony winning in Europe is also wrong as Microsoft has already stated they were at least a million ahead in the territory after Sony tried to claim it was ahead their.

    May want to do a little fact finding before writing a piece such as this.

    An analyst this week also stated Sony will probably never make a profit on the PS3 this generation based off DFC Intelligence numbers. The 3 plus billion they have lost to date is hump they may never get over, but at least Sony has admitted that this year.
    2008 Aug 20 09:20 AM | Link | Reply
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    I thought the article was very balanced save for one point, "The graphics processor is weak - holding back game quality". Well.....

    Uncharted - Drake's Fortune

    Thank You. Also, when LBP, R:FOM2 and Motorstorm2 come out this winter, perhaps we could re-visit this?

    It will be interesting to see how the AAA XBOX exclusives stand up against them. As I don't follow XBOX that much, maybe another poster could list them here. Just 1 will do if you can't think of 3. :) Remember, Triple A only.

    2008 Aug 20 09:29 AM | Link | Reply
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    "As far as Online. Yes the Xbox has an advantage becuase ITS BEEN RUNNING FOR 5 TO 6 YEARS. The PSN is only two years old and look where it's at. It's pretty much matching all of the features that Live has with execption of Netflix and some other small things like Voice chating. Hopefully HOME will boost PSN. "

    Hey mate, have you ever played a game over psn? I have and let me tell you, I am so glad i pay for "live" because it is dam near perfect! as for trophies, too little, too late-sorry sony- copycats! home, who cares, I want to play games, not walk around and chat! and by the way, the ps3 is going into it`s third year, where is it at? I think this article was pretty much right on, so all the ps3 fanboys quit trying to defend the ps3 with stuff that isn`t even here yet? mgs4 was supposed to be the xbox smasher wasn`t it? resistance 2 will sell well, to the people that already have a ps3, but it will not even touch gears 2, gears 2 will promt more console sales as well! gears 2, 360 price drop, yeah we know!
    2008 Aug 20 09:37 AM | Link | Reply
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    Okay people yes ps3 is way behind of the xbox 360 and by the way, its not 5.6 million consoles, its 2.5 million consoles where the hell did you find the stuff about the 5.6 million consoles that information is all wrong. For PSN im very glad I bought a PS3 rather than an xbox 360, I played live like twice in my cousins house and there is alot of dutch bags talking and talking and talking and humping each other which was im sorry to say..very gay... we were playing halo 3 online and I did not see no co-op with each other. I'm glad I bought a ps3 because the xbox 360's Dvd Drive will eventually wear out and the rrod they never found a solution to it. The ps3 has been working very well and I really dont have any problems I've had for 6 months while people who had a xbox 360 for two weeks die. As for games I really dont want more..Resistance 2, Little Big Planet, Killzone, Socom Confrontation, Home, Resitance, Ratchet and Clank, PSN Games, and Grand Turismo is all I need to b Happy. While Xbox EXCLUSIVES are Mass Effect, Forza, Project Gotham, Fable, and Gears of War which looks amazing but of course the dvd drive will eventually wear out with all the spinning. So my theory is this if you want an xbox get it and if you want a ps3 get it you are getting the same stuff such as getting great entertainment as for netflix i rather go rent myself a movie at the movie store. xbox live has 10 million subscribers while PSN has 9.5 million Subscribers wow I believe we are catching up and in PSN people congratulate you on the games rather be calling you noobs and saying they want to fu** u.
    2008 Aug 20 10:29 AM | Link | Reply
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    @garza:
    Do you actually believe yourself? dvd drive wearing out??? how long has dvd been here with no wear outs? do you realize blu ray is not beating out dvd? digital downloading is the future, better get used to it. as for the drive in the 360, M$ is well aware of the future, they are a software company, unlike sony (and it shows) as soon as the 360 gets the new fall update, all 360 users can decide if they want to load the game onto the hdd wich in turn will make all 360`s whisper quiet. and as i said it will be "optional" to load to hdd, again unlike sony!! you better get used to playing those games you mentioned for ps3, because we all know it takes 2 to 3 years to make a game for ps3, lol. 9.5 million subscribers to psn, woohoo. hey last ime i checked it is free? hence more users. and dont even try to compare psn to xbox live. as for rrod, I have never had any people i know have it, even so who cares, 3 year warrenty. BY THE WAY, HALO 3 DOES IN FACT HAVE CO-OP PLAY! do some research before you post lies! ps3 is a better built piece of hardware (sony=hardware manufacturer) but the best gaming experience is dfinatly on xbox 360 and will continue to get better this fall, with new update (the only software company).
    2008 Aug 20 11:18 AM | Link | Reply
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    PS3 is indeed ahead in Europe and Japan and has sold more PS3's than MS did 360's in the same time frame in the US. It's only a matter of when, not if, the PS3 passes 360 in North America.

    I much prefer the PSN. I hate online games (as do 95% of the gaming public) and would never pay even $5 a year for it but with Sony I get access for free. And I've been on Xbox Live. It's nothing but kids. If you're a pedophile go for it, you can voice chat and wack your bag but for the rest of us, the PSN is fine, free and getting better all the time.

    Blue ray was an incredibly important victory. Digital Downloads aren't replacing optical media anytime soon. Less than 1 in 4 households have a high speed connection in the US and another 1 in 4 have no internet access from their homes period. As a nation, the US ranks about 11th in the world in internet speed, it's not good. That also doesn't take into account the time to download an HD movie, the space it will take up on your hard drive or the fact that most consumers want a hard copy of their movies. Disney doesn't sell millions of DVD's for nothing, kids want to see the same movie over and over. Most adults also like to have a large video library and we don't want to worry about a hard drive crash and loss of all information.

    Blu ray will replace DVD as DVD replaced VHS. It took DVD longer to penetrate the market than Blu ray has taken and when TV goes digital in 2/09 and more people own HDTV's demand will increase and more and more people will buy a Blu ray player. I was a fence sitter with HD as I thought an upconverted DVD looked okay. And it does look okay. A Blu ray picture looks amazing however, something you will never want to take a step back from once you see it. And why spend $2,000 for a TV just to watch standard definition movies on it?

    Once last thing, the 360's fan sound like an aircraft carrier and yes, Microsoft is a software company, a bad one. Windows is full of holes, bugs, poor UI and is thrust upon us through Microsoft's operating system monopoly. They make the worst web browser out there. The only thing they do to acquire good software is find a company that creates it, buy them then destroy it.
    2008 Aug 20 12:48 PM | Link | Reply
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    @pfreak :

    www.gamesindustry.biz/...

    Take a look at this and then tell us that the GOD of all things is doing very very well! lack of games is killing sony, also pricing. it is a very nice machine at doing what it does best, play movies. I walk into a store and see nothing for the ps3 and a complete wall for xbox 360 games and also wii games. And this is the second year for the ps3, actually going into the 3rd. Blu ray will not be the next successor it cant even put a dent in dvd sales moron, and more people these days have internet connections high speed at that, thanks to the good ole phone companies. more than half of console owners, even almost all ps3 owners use the psn or live service so your post was nothing but ignorance. and all we hear is “wait” 2007 will be the year of the ps3, no 2008 will be, no wait, 2009 is going to be, sheesh. the ps3 will not beat microsoft this gen, the sales for xbox have slowed down because most people that wanted one already have one, now M$ needs to do what they are doing, go after the “casual” gamer and eat some of nintendo`s customers up, because they are also getting boared with the wii. by the time the ps3 starts to take over the 360 M$ will have introduced a new and way more advanced console ( It will happen you know, technology moves very fast, so if you think your ps3 will still hold up against the new versions of consoles you better think again) and it wont matter much then, thus M$ winning against sony.
    2008 Aug 20 01:24 PM | Link | Reply
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    Blu-ray is not going to win the format war. Better compression standards and fatter tubes will at the end of the day be all we need to make an end run around Sony forever. Gone is the day of top-down planned obsolescence. Sorry, Sony, we're not gonna swallow what you try to force-feed us any more. The future is wide open.

    Also, kudos to Bruce again for managing to write an article rife with speculation and denial of reality. Anyone else see the massive elephant in the room here?
    2008 Aug 20 03:46 PM | Link | Reply
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    The winner in this race will be who puts out the better games and that winner, per the public's opinion...is the Wii. The PS3 is a complete joke and its sales figures clearly show that. I'm not going to re-write the numerous posts I've put on this website before, but beleiving in the PS3's "unexplainable & forthcoming" turnaround is like saying Chevy is going to outsell Toyota real soon! Hell to the no, you have to be on crack to beleive that.

    Sales don't lie, we're approaching two years of the next-gen cycle and the PS3 is solidly behind all consoles...I'm suprised its managed to outsell the PS2 on a consistent basis. It will remain that way unless that sucker gets a huge price cut and exclusive games for it. Most gamers could care less about Blueray and the sales show it. If you just care about gaming, there is nothing Blueray brings to the table that the 360 can't do. If there is, what is it? And why haven't people beleive the argument? You cannot argue with facts.

    By the way, most games including COD4, GTAIV, and Devil May Cry look better and load faster on the 360 than the PS3 and that is fact, not fanboy flaming, and its been documented by sites such as gamespot.com several times over the past 2 years. I have a Wii & 360 and the odds of me picking up a PS3 are as big as me going to Mars. It ain't happening and I would say that's the prevaling opinion of most everyone. There simply isn't a reason to spend more money on a PS3 than there is to buy a 360 or Wii.

    Sony needs help, but I think its becoming a lost cause at this point...I don't see buyers mysteriously coming out in droves for a PS3 two years down the road. Too many have bought a 360/Wii or both and blueray isn't a compelling enough reason to yet dish out another $400 for a system that plays the same games as the 360.
    2008 Aug 20 04:31 PM | Link | Reply
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    @jman

    No Digital downloads is not the future and will not replace DVD or Blu-ray.
    This comes from PC World, FCC, and Gartner study.
    By 2012 only 77% of U.S. households will have broadband Internet subscription. Just over half of U.S. households currently subscribe to broadband Internet services. Just on a side note Broadband is defined as 256Kbps in the US (and that people is not true broadband).
    2008 Aug 20 04:50 PM | Link | Reply
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    Man, you certainly can easily differentiate the XBox owners from the PS3 owners based on writing ability, logic, and simple grammatical usage of the English language. Guess it basically explains why fools choose to purchase a junk heap like the XBox, and rationally minded folk side on the MUCH MORE reliable Sony system.

    ..and about the format war. It's over! Haven't you heard the news? Type in blu-ray on Google and do a news search. It'll be very revealing to those short-sighted folks claiming Blu-ray is dying out and movie downloading is the future. LOL!
    2008 Aug 20 05:39 PM | Link | Reply
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    crazychris and john, show us where blu ray has sold better then dvd and i will go quietly! and if downloads are not the future, why then must sony themselves do it? you would think the pushers of blu ray would desperatly not want movie downloads on ps3, at least not standard definition? hmmm.... by the way, its all about games isn`t it? not movie players.
    2008 Aug 20 05:48 PM | Link | Reply
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    @jman
    First please re read my post just in case you don't want to i will copy and paste. "No Digital downloads is not the future and will not replace DVD or Blu-ray." People will always want a hard copy of movies. There was a study put out and do you now what it found? I will let you know that over 70% of all people that download songs or movies have the exact copy at home on DVD, CD, Blu-Ray, or HDVD.

    By the time that USA even gets to true Broadband Japan and other countries will already have better options. Japan in May 2008 tested satellite service that can get 1.2 gigabits per second. We here in the USA are still classifying 256Kbps as broadband. The United States continues to fall behind in broadband adoption, ranking 15th among 30 OECD nations according to the latest installment of the
    organization’s semiannual (April 2007) survey of broadband subscriber ship. This same study and finding showed that we will fall further back.

    Here are some things you might want to know.
    New surveys shows Blu-ray expanding On June 3, the NPD Group released the results of their latest study:
    --Almost 4 million HDTV owners said they plan to buy a BD-capable player in the next six months.
    --Consumers who purchased a BD set-top player cited "leading-edge technology" and a "superior viewing experience" as primary reasons for making the purchase.

    According to a Sony Computer Entertainment American Internal Data survey of close to 3,000 PS3 owners in May 2008,

    --Approximately 52 percent said they plan to purchase six or more BD titles over the next year.
    --Approximately 50 percent prefer to exclusively purchase or rent movies in BD format, even if they have to wait longer for the title release.
    --Over 40 percent report increased movie viewing since the purchase of their PS3.

    According to Redhill Group for Home Media Magazine surveys,
    --Blu-ray disc software sales in the U.S. have exceeded the 11 million mark.
    --Blu-ray disc software sold for the first quarter of 2008 were more than 4.5 times the amount sold the same period in 2007.
    --In the first quarter of 2007, Blu-ray disc sales for day-and-date titles represented only 1.7 percent of the total sales for the top 10 selling titles compared to the DVD version. For 2008 that number has increased to 14.3 percent.

    The Blu-ray Disc Association announced that there are approximately six million Blu-ray capable machines in the hands of consumers now, with more than 80 Blu-ray options on the market for consumers to choose from: 12 PC drives, 40 PC options, 14 stand-alone players, the PS3, and 13 players announced to appear before year's end.

    According to Home Media Research compiled by the Redhill Group, it appears that Blu-ray sales are actually quite solid for the year, and up 300 percent year-on-year from 2007.
    The research says that Blu-ray movies are selling at about 1.14 million per month on average for the year. The combined total for 2006 and 2007 was about 6 million discs sold. So 12months x 1.14million per month =13.68 for the year that means the more than double the 2006 and 2007 total.

    According to Home Media Magazine's own figures, in the optical video disc market, DVD still has a 95 percent share vs. Blu-ray's 5 percent. By comparison, high-def percentages during the height of the format war rarely topped 2 to 3 percent of sales. This little nugget of info was in the artical were hey were blasting Blu-Ray sales. So during all of 2006 and 2007 when there was 2 choices high def sold only 2-3% of movies vs standard def but since the end of War in Middle Feb of this year High def now makes up 5% of the movie sells hmm a 2% increase in 6 months.

    In response to Sony doing Digital Downloads. Sony Pictures is one of the world's largest media conglomerates with revenue of US$88.7 billion per year. Yeah um i think there in the business of selling movies and making money of those films if thats by downloads, dvds, blu-ray, etc. Come on do you really think there going to throw away a chance to make money off people.
    2008 Aug 21 06:44 PM | Link | Reply
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    Damn, how much is sony payin y`all?? and by the way 2% in 6 months? ok maybe i was wrong, blu ray will take over dvd, IN THE YEAR 2026!! even dvd rentals are almost obsolete, go get those stats, blockbuster is going to eventually phase out all instore rentals! sony was too late in killing hd dvd, downloads will be the future, you should give it a try? I can download a full hd movie in about 2 hours,(and thats with dsl!) . you sound like a good statistics guy, instead of looking at it on paper, how about actually living it? the ps3 is supposed to be "way better" than the 360 on paper, but here in the real world, into it`s third year- we dont see it. xbox 360 price cut, gears of war 2, "live", fall update, optional game install (whisper quiet 360`s- my new 60g is already quiet) the ps3 will always be last this time around, sony is finally feeling what it was like to be sega! REMEMBER, IT IS AFTER ALL ABOUT GAMES!!! and we know who has them!
    2008 Aug 21 08:23 PM | Link | Reply
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    Blu ray will not be the next format, king dvd will be here for a while longer:

    Toshiba XDE.


    At the start of this year we all witnessed Toshiba’s HD-DVD as it was going, going and then gone. Well now they’re back enhancing DVD, possibily to try and disrupt the uptake of Blu-ray.

    XDE, or “eXtended Detail Enhancement,” technology is, Toshiba claim, more than just a DVD upconverter - taking ‘normal’ resolution DVD up to being able to show them on HD TVs.

    The theory is that people have invested considerable amounts of money in their DVD libraries over the years and rather than have to replace them by buying Blu-ray versions, they can spend $149 on buying an XDE DVD player instead.

    While changing the resolution from 480i/p to 1080p, there are three other selectable enhancements - Sharp, Colour and Contrast.

    They details these as …

    Sharp Mode offers improved detail enhancement that is one step closer to high definition. Edges are sharper and details in movies are more visible. Unlike traditional sharpness control, XDE technology analyses the entire picture and adds edge enhancement precisely where it’s needed.
    Colour Mode makes the colours of nature stand out with improved richness. Blues and greens are more vivid and lifelike. Colour Mode combines the improvement in colour with the detail enhancement of Sharp Mode and is ideal for outdoor scenes.
    Contrast Mode is designed to make darker scenes or foregrounds more clearly visible without the typical “washing out” that can occur with traditional contrast adjustment. Recommended for dark scenes where detail may be difficult to notice, Contrast Mode is also combined with Sharp Mode to provide a clearer viewing experience.
    All of these enhancements are achieved by clever chippery that examines the video frames as they are to be displayed and manipulates them before they are shown. goodbye ol`e blu
    2008 Aug 21 08:39 PM | Link | Reply