Sony selling their Blu-Ray factory to Toshiba

[G)-(OST]

A bit of surprising piece of news appeared today on the internet - the format war between HD DVD and Blu-Ray is officially over and one shop after another gets rid of everything with HD DVD logo on it. One would expect Sony and other companies promoting Blu-Ray format to strengthen their position, but exact opposite happened: Sony Corp said on Wednesday it will sell its microchip production facilities in western Japan to Toshiba Corp for 90 billion yen ($835 million), in their latest move to focus on their core businesses. The equipment will be used by their semiconductor joint venture that will make high-performance Cell chips and RSX graphic chips, both used in Sony’s PlayStation 3 game console, as well as other microchips that go into Toshiba products.
The venture will be established on April 1. Sony, which is focusing on image sensor chips for digital cameras and pulling away from heavy investments for cutting-edge chip production equipment, said in October it would sell production facilities for making key microchips used in the PS3 to Toshiba, but the price has been unavailable. It’s also well known that Sony had to pay a lot more money (estimates ranged around $300 / unit) for every PS3 console with Blu-Ray drive, which turned out to be one of the reasons why this format won in the final battle with more than 8 million owners in contrary with only 1.4 million sold HD DVD drives.

Did anyone see that coming???

SOURCE http://www.reuters.com/article/businessNews/idUST28617520080220

[Epicurus8a]

[jagabo]

tit-for-tat?

[MOVIEGEEK]

I knew that the PS3 used the Toshiba cell processor,I guess the rumors that Sony was losing money on the PS3 were true.

[hanugro]

AFAIK cell processor is a joint development between IBM, Toshiba, and Sony.

It all the same Sony also loosing money when PS2 first come out. But they gain later when PS2 dominate console games. It is all in the strategy. Whether it work this time is another matter.

[SingSing]

Cell is developed by IBM, Toshiba, and Sony.

Cell is like putting a bunch of IBM powerPC(remember Mac?) on a die.

Toshiba and IBM always has close Semiconductor process link since the day they worked on DRAM(remember 486?) together(I had to goto the lab and called Japan at funny hours). I am not suprised that Toshiba takes over Cell production.

[Rich86]

AFAIK cell processor is a joint development between IBM, Toshiba, and Sony.

It all the same Sony also loosing money when PS2 first come out. But they gain later when PS2 dominate console games. It is all in the strategy. Whether it work this time is another matter.

Well, maybe Sony can make it up now on increased priced blu-ray players?

[SingSing]

Hmm, did Sony uses Cell in their blue ray players too ?

Toshiba uses Analog Device's DSP processor in their RIP HD DVD player.

[hanugro]

Well, maybe Sony can make it up now on increased priced blu-ray players?

They don't have to if PS3 dominate again. They will get moneys back from games, royalty, etc. Also when the cost of production down (due to economic of scale and other factors) then they can make profit on the console as well.

[hanugro]

Cell is developed by IBM, Toshiba, and Sony.

Cell is like putting a bunch of IBM powerPC(remember Mac?) on a die.

So it is a multi cores PowerPC? What nm that its use in fabrication? With the size of transistor down we can look forward to cooler and cheaper chip as well.

[jagabo]

The Cell archicture used in the PS3 has one PowerPC core and several specialized vector processing "cells". It's not simply a multicore PowerPC chip.

[SatStorm]

Sounds natural.

Since BD won the "war", for as long as BD exists, Sony gonna have a guaranty income from the BD discs, because of the royalties and the patents (same way Philips get royalties for every CD out there -I don't know if it still does-).

Guaranty profits without any troubles.

[SingSing]

Philips could not made audio CD work, so they partnered and used Sony DSP expertise to deal with digital crack and pop. Thus Philips and Sony are the co-inventors of Audio-CD.

If CD loyalty is still eligible, then Sony is still having its hand in the piggy bank.

[jstewart]

I still don't see DVD going anywhere fast enough where Sony (knowing how they price things) is going to make a killing off of BluRay. The problem most is too many people have already spent too much time, effort, and money into dvd to where nobody will be jumping hoops to get a player or movies. If they want to succeed, a dual player has to be developed.

[jagabo]

Now that Sony controls the HD disc market they will release their new titles on BD first. You'll have to wait several months for SD DVD. This will provide incentive for people to buy BD players.

[Midzuki]

jagabo, you forgot to put quotation marks around the word _incentive_

[SCDVD]

The funniest part of all of this is comparing how Sony and Toshiba have been going about the business of carrying forward versus the fanboy rant of the HD DVD and BlueRay camps. Some of them sound like a drunk father at a high school ball game. Give me a break! Sony lost the Betamax versus VHS war a number years ago and what did they do? They got into the business of making VHS equipment! Toshiba is doing the same thing now with BlueRay. It's done; get over it.

[jagabo]

jagabo, you forgot to put quotation marks around the word _incentive_ :wink:

And with the lower piracy rate and higher prices of BD they probably won't have much trouble convincing other studios to do the same. The people who will only buy SD DVD will still buy them when they're released so there's no lost revenue.

[MOVIEGEEK]

Toshiba is doing the same thing now with BlueRay. It's done; get over it.

Toshiba stated they will NOT be making a Blu Ray player,here's a few reasons why:
1.They are not a member of the BDA.
2.They will make more money producing high quality DVD players and recorders.*
3.They are selling HD DVD players at a loss and there's too much competition with BD players right now...especially the popular PS3.
4.Blu Ray's future is not certain.
5.They just bought Sony's manufacturing plant that produces the Cell processor for the PS3.Toshiba makes money while Sony breaks even on the PS3.

*In 2007 sales of DVD's were $16 billion vs $300 million for HDM.

[SCDVD]

Toshiba is doing the same thing now with BlueRay. It's done; get over it.

Toshiba stated they will NOT be making a Blu Ray player,here's a few reasons why:
1.They are not a member of the BDA.
2.They will make more money producing high quality DVD players and recorders.*
3.They are selling HD DVD players at a loss and there's too much competition with BD players right now...especially the popular PS3.
4.Blu Ray's future is not certain.
5.They just bought Sony's manufacturing plant that produces the Cell processor for the PS3.Toshiba makes money while Sony breaks even on the PS3.

*In 2007 sales of DVD's were $16 billion vs $300 million for HDM.

Let time play its role in all of this. Press releases of the moment reveal very little about any company's actual ongoing strategy and plans. I'm sure you won't be seeing any Toshiba BlueRay players at Best Buy next month. But I am also sure that IF at a future point Toshiba sees a market reason and opportunity with respect to BlueRay players, they will enter the market and there is no doubt about it.

[hanugro]

Toshiba is doing the same thing now with BlueRay. It's done; get over it.

5.They just bought Sony's manufacturing plant that produces the Cell processor for the PS3.Toshiba makes money while Sony breaks even on the PS3.

*In 2007 sales of DVD's were $16 billion vs $300 million for HDM.

http://www.eetimes.com/rss/showArticle.jhtml?articleID=206800618&cid=RSSfeed_eetimes_newsRSS

Seems Sony still own parts of it.

And to all Toshiba lovers/fanboy isn't it nice to see Sony and Toshiba working hand in hand? Bet Toshiba loves all the money they get from your HD-DVD purchase (sarcasm).

Well reagarding sales isn't it the same with VHS and DVD back then few years ago? If the price of BD players drop to US$200 and more ppl buying full HD TV then BD sales will start flying. I predict in 2 years time. BTW all BD players also (upscaling) DVD players so the transition is even smoother than VHS to DVD.

I will buy HD player when the price is right. Have been living in cutting edge in the past and realised that it is not worth it (for me).

[DereX888]

And to all Toshiba lovers/fanboy isn't it nice to see Sony and Toshiba working hand in hand? Bet Toshiba loves all the money they get from your HD-DVD purchase (sarcasm).

God how I hate this kind of bullshit "fanboy" talk.
Toshiba had no fanboys. There are Sony fanboys, Apple fanboys and fanatics, even Micro&soft has fanboys, but not Toshiba LOL.
I prefer HD DVD but in no way I am a Toshiba fanboy, nor ever will be I am very disloyal to any brands and brand name have no bearing on my choices (however 2 brands in particular are on my no-no list ).
Most of people who bought HD DVD players bought them because of price. Another large group of HD DVD buyers were those who wanted particular titles not available on BR DVDs (at least at the begining). These 2 groups cover probably 99% of HD DVD owners.
The last 1% are probably early adopters and conscious consumers like me (who didn't want to help grow yet another giant monopolist on the market).
On the other hand majority of BR DVD player owners probably are the owners of Sony PS3 (at least from what I have noticed in the course of HD vs BR discussions on this message board they are), thus often it wasn't their choice of format but simply it came with the gaming device.

Toshiba certainly loves the pile of money they got - but not from us, the HD DVD player buyers, but from SONY (obviously not in cash, but in deals like this manufacturing plant and others we will hear about). There were not enough of 'us' for Toshiba to 'love us' for it obviously

[Seeker47]

Aha, the plot thickens.

The Toshiba HD camp was a considerable force to be reckoned with, in their own right. I was wondering why they would just fold up their tent without mounting more of a fight . . . ?

[hanugro]

Ha ha, please don't tell me there is no Toshiba fanboy. It is not intended to you DereX888 but there are Toshiba fanboys somewhere. Like laptop, I know ppl who insist on buying Toshiba brand.

However I am bit confuse with your claim that Toshiba getting the money from Sony. Sony sold Toshiba 60% of the plant so Sony is the one who is getting the hard cash.

Anyway business is business. Those company will do anything that gives them max profit. BTW this is good news for me that Sony want to concentrate on camera sensor instead. I own (Konica) Minolta dSLR system and Sony bought the whole system 2 years ago.

I think ppl should aware of these things when new format appear, especially if there is no unified format. I bought APS SLR thinking they will dump the old film but it does not happen. Thankfully digitalSLR arrive but my old APS SLR is becoming paper weight as no one will pay even $100 for it. I understand it hurts your pocket when this happen, hence I learn and no HD format for me until it gets cheaper.

[DereX888]

Ha ha, please don't tell me there is no Toshiba fanboy. It is not intended to you DereX888 but there are Toshiba fanboys somewhere. Like laptop, I know ppl who insist on buying Toshiba brand.

However I am bit confuse with your claim that Toshiba getting the money from Sony. Sony sold Toshiba 60% of the plant so Sony is the one who is getting the hard cash.

Alright, maybe there are some few "Toshboys" Too bad for them LOL

I don't know details, but corporations have many ways to legally corrupt each other, things you as a person would be prosecuted for - are often very legal when it is dealt between legal entities such as these corporations.
Maybe Toshiba paid i.e. $100M of the cold hard cash to Sony, but received a factory (or part of it) worth more than $1000M, see? In such case it might look to you as if Toshiba is paying 100 Mil to Sony, yet in fact it would be Sony giving back 900 Mil to Toshiba (as a payment, a "token of appreciation" etc for Toshiba getting out of their way in the movie business...) - and its all fine, legal and kosher in the eye of the law(yers) and shareholders too
Of course *we* probably will never know the details. It might have been a coincidence. Your guess is as good as mine.

[MOVIEGEEK]

Toshiba and Sony are not stupid,they are both hedging their bets by diversifying just in case Blu Ray flops.
Remember the real money to be made in HD is content so the movie studios have more to lose if Blu Ray fails.
BTW:I wasn't being a "Toshboy" in my previous posts,I was just looking at it from a business point of view.

[DereX888]

Toshiba and Sony are not stupid,they are both hedging their bets by diversifying just in case Blu Ray flops.
Remember the real money to be made in HD is content so the movie studios have more to lose if Blu Ray fails.
BTW:I wasn't being a "Toshboy" in my previous posts,I was just looking at it from a business point of view.

Yes in this case it is all in the content, the disc format is just a "content delivery" method/device. Thats why I said few posts earlier - there was no way for Sony Corp. to loose this 'battle' given the fact Sony is currently (directly and indirectly) one of the largest content making and content owning corporations in the world.

[jagabo]

Sony's goal is to be the Standard Oil of entertainment. They want monopolistic control the production, refinement, and delivery of music and video.

[FulciLives]

Did no one consider that this is fake?

It says that this is to happen on APRIL 1st ... duh ...

- John "FulciLives" Coleman

[SingSing]

God how I hate this kind of bullshit "fanboy" talk. Toshiba had no fanboys. There are Sony fanboys, Apple fanboys and fanatics, even Micro&soft has fanboys, but not Toshiba LOL.

The people who are labeled Toshiba fanboy recently, must had one time labeled fanboys for JVC, or Pioneer, Mitsubitshi or Sony. They are typically people who try to get the best values for their dollars.

Did no one consider that this is fake?
It says that this is to happen on APRIL 1st ... duh ...
- John "FulciLives" Coleman

Good catch, kill the tread.