David Strom wrote fascinating editorial regarding formats and provides a historical lesson (ah, the old days of floppies... first black, then green, orange, red, and blue). Imagine if an automotive company decided to produce a car that uses a new kind of gasoline -- not leaded, unleaded, or diesel -- a brand new one also manufactured by the company. How stupid would that be? Customers won't buy the car knowing it limits their gasoline options and the places to go for filling up the car. The company thinks it can make more money by requiring its brand of gasoline for the car. Let's try to spell it out as I am lousy with numbers. Note: An average car puts on 10,000 miles. We'll give this car a rate of 15 miles per gallon (higher than SUVs and lower than energy efficient cars). 5 cars using the company's gasoline purchased One car costs $10,000 Gas costs $2.20 per gallon 15 miles per gallon 667 gallons per year Gas cost for one year: $1467 Company earns $57,335 for five cars and gas. But if ABC Automotive had brains, it would build a car that uses the standard unleaded fuel. People like the car and since it works with standard fuel, the gasoline barrier doesn't exist. Thus, more people buy the car. 6 cars using standard fuel purchased One car costs $10,000 Company earns $60,000 without selling gasoline. However, it's likely to sell more than six cars since the gasoline barrier doesn't exist. It's only a one car difference and the company makes more money. We haven't covered competition. Someone out there will duplicate the gas and offer it for a lower price, thus taking money away from the company. My point? Nintendo, Sony, and Microsoft do this with their game consoles. I had considered the Sony Clie, but one factor prevented my buying it... the memory stick. I don't like its limitation of working with only Sony products. When we wanted to get Dance Dance Revolution (DDR), which only comes with PS2 and Xbox -- we learned PS2 had better DDR choices, but Xbox had a better collection of games and features. Imagine how much more money each company could make if the software could work on both systems? But the software development companies stand at the mercy of the hardware companies. Hence, many games have a version for various platforms including the PC and the handheld devices. But it's gaming and they are going to make it proprietary. The companies want it that way. The PSP is Sony's jump into the handheld gaming arena where Nintendo has a monopoly. The 5.25 floppy was not a standard when it came out. The standard was 8" floppies. 5.25 became the standard when the two biggest bullies on the block (Microsoft for software and IBM for hardware) got in bed together and made it the standard by sheer market dominance. Same thing here. Nintendo has the dominance in the handheld arena. Sony wants in on the action... SO what do they do? Sony creates its own handheld and format (UMD - Universal Media Disk). Furthermore, a couple movie companies Disney, Columbia (Surprise! Sony-owned) will produce movies in the format. So Sony is furthering its efforts by having their movie company make movies for the format. Disney just jumped on board. Until a uber-dominate power is in place, you are going to have the multiple formats. HDTV has been around since 1996 or so. The "standard" has finally settled will be in wide distribution 2007. I expect gaming to take much longer... if ever. |
