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Sunday, March 2, 2008

The future of home entertainment

So, the war of format for high-definition discs is finally over. Blu-ray won! For those of you who have had discussions with me on the subject, my position has been that in the long long run, the content will be distributed digitally over the Internet and not over physical media like a disc. However, digital content distribution is a few years away and two big hurdles remain-DRM (Digital Rights Management) and broadband speeds (currently too slow). In the meantime, Blu-ray has the higher probability of winning the high-definition disc format war. Now, Blu-ray has won the disc war but the battle for discs vs. digital content distribution is ongoing. See http://www.toshiba.co.jp/about/press/2008_02/pr1903.htm

Due to my laziness, I did not document my position on my blog or any other place which I could point you to (like I can with Starbucks prediction). In any case, the point is that by applying the concepts of Complex Systems one can accurately predict the adoption of any innovation. In a research paper I co-authored in January 2007: Coalition Emergence in high-tech industry, we explain how coalitions get formed in the high-tech industry using the Blu-ray and HD-DVD example and discover/establish Universal laws that dictate coalition formation. After writing the paper and getting queries on what I think about who will win the format war. I put my money behind Blu-ray by purchasing a PS3 on January 31, 2007. For those of you who don't know, Sony delayed the launch of PS3 by almost a year so that it could make the Blu-ray player work on the PS3 and seed the market with the Blu-ray player. At the time, it helped Microsoft gain market share with XBox 360. This year, PS3 will outsell XBox 360 as predicted by many analysts and it has already happened.

PS3 has a technological leap over XBox 360. It uses Cell Processor which positions it for supercomputing applications. And, what "cool new stuff it will enable", no one knows yet. One application, I am currently using on my PS3 is Folding@home. It is a distributed computing application pioneered by Stanford University. How it works is that when I am not using my PS3 (it is always connected to the Internet), Folding@home uses the computing power of my PS3 for its research in understanding protein folding and its relationship with related diseases.

Cell Processing exponentially increases the power of distributed computing. The point is that PS3 will have a much longer product life cycle and capabilities than any other gaming console in the market. It has many built-in features which Sony has not enabled/marketed/commercialized due to business reasons (you can read about these at any of the popular blogs).

The most fascinating attribute of PS3 is that it can evolve. A fundamental attribute of any successful system! For at least the next three years, Sony/PS3 will maintain its lead over XBox 360 and will dominate the high-definition content distribution.

Chander

P.S. I have left the Wii out of this discussion since Nintendo is targeting casual gamers and is focused on gaming only (based on publicly available data).