Microsoft: The future is digital distribution

MCV: Mirroring remarks made by European VP of Microsoft Interactive Entertainment Chris Lewis to MCV last month, UK Xbox boss Neil Thompson has insisted that his company did not back the wrong horse when it supported Toshiba and its HD-DVD high definition disc format.

"The horse that we're fundamentally backing is the one that says the future of entertainment content is online digital distribution. I would argue that we backed the right horse.

"If we're sitting here in 12 or 18 months time, we'll be saying 'why were people even thinking about a disc format when it's really about digital distribution?' Our strategy's been developed for the last six or seven years, and ever since we launched the platform online content has been our big, big, big bet."

[Horny Melon]

It's that it never placed a bet.

[ukilnme]

I'm inclined to agree. They wanted both HD formats to fail in favor of digital distribution. Even if they did pick an HD format as an internal drive for the 360, they would have been delayed with the release of it and the PS3 would probably have crushed it out the gates. Blu-ray has one the HD format race but it's still a three horse console race.

[sonarus]

blu ray has become a major selling point for ps3 just like dvd was a major selling point for ps2. Did anyone catch southpark last nite where they did their little "i learned something today rant?". They too say internet distribution is far from ready because internet hasn't matured enough. lol i wonder if they support the console wars

[MikeMichaels]

HD-DVD players to its customers knowing they'd get screwed over down the line??

Thats much better then saying something like "hey, we took a gamble and we lost".

...and people say Sony is arrogant.

[Gorgon]

Ukilnme:

don't be naive. MS didn't want both formats to fail, they wanted HD-DVD to win. How does a company with such foresight to try to kill such formats so that DD can win (and they said that it was their plan for 6-7 years) launch a console with a SKU that doesn't even have an HDD? And the PRO has a 20GB HDD...

Sorry, but anyone can see that this is called damage control. Just the same when Sony said that rumble was "last gen feature" and then brought it back and when people asked why they said it was last-gen they answered "well, what did you espect us to say?".

Damage control, people. Wake up.

[ukilnme]

@ Gorgon

"don't be naive." Funny.

If MS had fully backed HD-DVD they would have made the drive internal making it useful for games. Instead they took the approach to partially back it with an external drive. This was all an attempt to extend the format war while pushing their own agenda of digital distribution and it worked for a little while.

You can call it damage control if you wish but the fact remains that digital distribution was and is MS's end gaol.

[deeznuts]

So was Michael Bay right the whole time when he complained about Paramount's switch to HD DVD?

Remember when fanboys across the internet ripped Bay when he made those comments, as if people sitting at their computer know more than him?

[Gorgon]

ukilnme:

the reason why MS did not include a HD-DVD with the 360 was because of price. They also felt it would not be needed and that DVD9 would be more than enough. They also did not include WIFI even in Elite. They also released a SKU that doesn't even have an HDD, which is quite a weakness and conditions game development to the lowest denominator that the Arcade is, and the PRO only has a 20GB HDD. I could go on. Does this all strike you as a carefully planed strategy to prolong a format war and win on the digital downloads side???

Don't feel offended, its not that my intention at all, but I do think you are beying naive in this particular issue. MS is trying to accelerate DD now because they can't really do anything else. Even worse is the fact that the 360 is not prepared at all for it in terms of high storage (heck, not even LOW storage).

"You can call it damage control if you wish but the fact remains that digital distribution was and is MS's end gaol."

It wasn't. But it is NOW.

[uie4rhig]

its just not possible to make DD the future if you are not including a hdd inside the console, how can people download anything without storage?

so i guess what MS is doing currently is damage control

[MorganX]

Just one more and I'm done...

If one more MS exec issues a statement against Discs and Bluray in particular, I'm withdrawing my support. I'm going to forfeit all of the games, XBLA games, and movies I've purchased and sell my Xbox.

Microsoft is punishing the consumer to take the cheapest route to the highest profits while not delivering value to the consumer. Not supporting an HD device and advanced HD audio formats is just wrong. Their bottom line is bigger if they don't support Bluray so they're spewing this ridiculousness. Not integrating HD-DVD was their business decision to keep prices low, it worked at first, but now the tide is turning and they don't want to foot the bill. They'd rather convince the consumer getting screwed feels good and you don't really need to own your movies, and you don't need alternate endings and bonus material, etc. etc.

One more official executive statement like this and I'm done with the Xbox 360 platform Gears of War 2 or not.

They're like Hillary Clinton now, I'm just plain old tired of the lies, deceipt, and quest for money and power at the expense of the rest of us.

[ravinash]

They rather say that they intended to back the losing format so that the market would be killed and they can screw over their customers in the process rather admit they back the wrong horse.
Its MS once again trying to dictate what the customer wants rather than supplying product that we really do want....same old tactics, removing the competition by any means possible.

[Citizen Cook]

Is he suggesting that downloading will nfully take off within the next 1-2 years? How? If true, I want a 5 TB HDD M$! THEN i'll thRoW my blu-ray plaqyer in the bin!

HA HA HA HA!

[leon76]

Ahahahahahaha!! Do that you stupid noob, and then you will see the sh*t you done!!! Ahahahahahaha!!!!

[Sir Ken Kutaragi 4]

PS3!!!!!!!!!!!! ;-D

[Amanosenpai]

Digital Distribution wont be real till good broad band providers cover every zone with a reasonable price...

I mean, DD will be great for the next gen systems ^_^, the 720, PS4, and the Nintendo (strange Japanese name here).

[INehalemEXI]

Seems to me PS3 is more DD ready then any console. Allows for users to upgrade at there discretion.

If the future is DD why MS gimp the 360 by having a model with out an HDD? If all your content is DD better start putting out some HDD larger then 120 GB.

[Kemicalbeliefs]

FFS can we stop with this Microsoft marketing campaign please? No matter what you try and tell me what to think, digital distribution is not high on my wanted list for the future. They may have prolonged the format war but they will not end up winners.

I want physical media that I control. I can watch, fall asleep on, wake next day, watch again, watch next week, watch in my PC, I'm not limited per machine, its not sh1tty 720p, its not filling up a hard drive that could potentially fail, its not limited to a specific source of where I have to buy it, its not price fixed, oh just its not DRM.

Just take your back pocket pay offs and talk to the mirror because we disc lovers are not interested.

[Montrealien]

So you clearly think DD is not the way of the future, that is your opinion. that is all, not like what you just said is written in stone.

oh, and I really hope that tin foil hat is protecting you from the Microsoft conspiracy rays....disc lover., lol

[MorganX]

@ Montrealien

The issue isn't DD itself. Sure, DDs are great. But MS is saying, becasue DD is more profitable for us, we're refusing to give anyone choosing our platform Choice. We're forcing them to accept lower quality DDs today with the promise of maybe it'll get better to the exclusion of better quality alternatives that are here today (Bluray, 1080p, Dolby-TrueHD, Dolby-Master Audio).

It's almost a matter of principal. It's not in the interest of consumers to allow Microsoft to get away with this. Microsoft does not want to let the market choose, they want to dictate the market. And the only thing consumers can do to fight back, is to choose alternative platforms until MS listens and returns choice to the Xbox platform.

When I want to rent, I have downloaded many Live! movies and have bought several TV Shows and series. But when I wan to own a movie, I buy Bluray. Bluray's cost between 14.95 - 24.95. Those are good price points for the quality and will only get cheaper.

Furthermore, the Xbox fan is so loud, I don't rent anymore from Live! because the fan interrupts quiet passages. MS needs to release a silent fan upgrade or a new SKU with silent operation.

[Fishy Fingers]

I dont recall them saying this 6 months ago during the format war....

[crck]

If blu-ray isn't dead in 12 to 18 months MS is nothing but a bunch of bullsh!ters. BTW if digital distribution is their "big bet" why don't they give people a decent hard drive option for their 360. $180 for 120 gb hard drive is borderline criminal. You can get can a 320 gb drive for that price and still have enough to take a friend to lunch.

[ukilnme]

Good point. Just another way to squeeze out extra cash from the consumers.

[MikeMichaels]

They are almost 10 years behind in this tech.

Apple, im sure we can all agree, is going to make the most off the DD craze. The only reason you dont see them releasing a press snippet every week about how it "gonna be teh future" cause they are doing it now.

They already have the software and the hardware in 100's of millions of homes.

[MorganX]

@crck

Your statement is incomplete, you can get a 320G for that price for a PS3. For your Xbox 360, your just Sheet outta luck.

I did buy the 120G @$179, had no choice. I bought a 160G for my PS3 for $100. Sony is not my favorite company by any stretch, but MS is making them look better everyday. In the longrun, you never win screwing the customer. Never.

[bootsielon]

And internet connections aren't fast enough for everyone to stream Blu-ray quality HD videos.

[tigertom53]

again I believe that it great to have downloadable content and download and renting, but when it comes to games they will have to come up with a format bigger then dvd, so it will have to be a blue ray player or something better next console they build. they might just be pushing the download movies until the next console. I hope the at least come out with a blue ray add on, I know they will never will have it built in the 360 because of the specification of the blue ray drive reading dvd content would be out of spec with the current console.
my thoughts TOM

[sonyfanonly]

M$ should not even try with DD right now because not every body has a PC or internet connection yet its just hopeless to force people into this stuff and i know you sony haters are going to say well what about sony - well let me tell you this sony creates technology then lets the consumers find out about it themselves thus letting the consumer decide if thats the right product for them - unlike M$ saying here buy this you need it - you dont try to sell an umbrella to an hippo they just dont want it

[Brian5247]

What new form of media will Microsoft turn to after digital downloads get burned by Blu-Ray?

[ukilnme]

They will go blu.

[SKUD]

THE OPTICAL DISK WILL NEVER DIE!

[MorganX]

I'll meet you half way, physical removable media will never die.

[gdguide]

The future is also in gasless cars, but there isn't the infrastructure to support that shift yet either.

MS shot themselves in the foot when it comes to affordable, viable storage media for this HD content. Most 360s have 13gb of free space, and to upgrade, you'll have to spend $180 for what? 160gbs? Enough for less than 10 HD movies?

The future IS digital downloads, but that future is at least 7-8 years away. Until MS can offer a 2tb HD for the 360, people aren't going to want to erase or archive their HD content onto another HD to make things fit. It's just stupid.

If anything, the PS3 with it's open standards for HDs are more in line with HD content. As prices drop on HDs, users don't have to wait for an overpriced branded Sony Hard drive to boost their storage capacity. 360 owners will always be behind the storage curve since MS seems so insistent to rip people off with their overpriced MS branded hard drives. 360 owners pay $180 for MSs biggest HD. PS3 owners pay 1/3 of that, and can already opt for bigger for a lot cheaper.

[RealityCheck]

Actually a good comparison with the future of cars. It's not a technology problem, it's an economic one.

[tigertom53]

well am sure Microsoft doesn't have plans to purchase movies by download your right the drive will have to be much bigger and broadband standards would have to get better and more available in future am sure they will. but for small content and download to rent is the future. am sure the next console will have blue ray, or at least the 360 will come out with blue ray add on. what Microsoft is saying they have no plans for a built in blue ray drive another reason am sure they will not add a blue ray player because of the slower speeds of 4x blue ray player compared to 16x dvd player at the speeds would change during load screens and would mess up only play and other details.

[Monchichi025]

Because Digital Distribution is High on Mine!!! I'm already downloading movies whenever possible

I mean, why buy a movie when you can have it at your fingertips whenever you want it at a click of a button. When I usto buy movies, I would pay $20 to watch it once and then it sat in my movie collection, never to be watched again. That's why I haven't bought a movie in over 2 years. (Except the Free Bluy-Ray movies I got when I bought my PS3 if that counts.)

[Gorgon]

How does a company with such machiavelian foresight to try to kill such formats so that DD can win (and they said that it was their plan since 6-7 years ago) launches a console with a SKU that doesn't even have an HDD? And the PRO has a 20GB HDD...

You see, a console is a console because everyone can play games on every single SKU. Just like GT:5 prologue can be bought on disc or through DD if you prefer. You can't do this on a 360 because there's a SKU called Arcade that doesn't even have an HDD. Oh, and I really feel like a "pro" having a console with 20GB that is hardly enough for game patches and save games...Does this strike you as the plans a company who has been planing DD "for 7 years" and that wants to make DD the standard NOW would do?

Sorry, but anyone with at least two working neurons can see that this is called damage control. Just the same when Sony said that rumble was "last gen feature" and then brought it back and when people asked why they said it was last-gen they answered "well, what did you espect us to say?".

Damage control, people. Wake up.

[fenderputty]

MS half-ass backed HD-DVD. They could have done this to slow BD's success to leave room for DD or, they could have done this to garauntee that their console hits the market first (year in advance). If they went in this full force, they would have added and HD-DVD player with all consoles and it would have come out close to the PS3 and at almost the same price.

MS might not even be in the position it's in with the console had they gone in full force. Who knows how the 360 would have sold if it came out later and as expensive as the PS3. Considering the PS3 is now outselling the 360, I would have to think that it wouldn't be looking as good for them but, who knows for sure.

Ok ... so then MS was really only doing this to postpone BD right? That's great and all but, what does this say about the company? It says that they were willing to sell customers a product that they never really intended to support. It means they used people for the greater good of DD.

Lastly ... if recent sales results and projections carry any weight, which they do, then MS has got to be nuts thinking DD is they way of the future. There are sooo many reasons that DD won't come for years. The MP3 hasn't killed the CD. People have been able to download DVD for a while too and, that hasn't caught on either. It definitely hasn't killed the DVD off as well. What makes anyone think that full length HD movies are going to come on a mostly digital distribution chain this generation? People don't have the bandwith, people don't have the storage, people don't even have a way to take their downloaded movies with them. Outside of the US, people might have bandwidth caps too and now, some people in the US do also.

Sure DD is probably going to come. When it does, I'll jump right in on it. Realistically, it ain't happening any time soon though. Physical media is here to stay for a while longer. I think MS couldn't support HD-DVD as much as they would have liked because, they needed to get their console out first. HD-DVD was just a bonus to them. They're acting like little butt-hurt crybabies. BUt but buu but ... the DD is the roxors people! Really ... take it from us, your trusty company Microsoft.

People using DD right now are ahead of the times. Feel cool too cause you're going to be a "special exclusive" part of the market for a while.

[SL1M DADDY]

Sorry, but MS should just admit to backing the wrong horse and let their failure in the next format market die. If they were to just come out and admit that they backed the wrong guy and wasted money going up against Sony they would have saved face and we would have all forgoten about this issue. For pete's sakes MS, just admit you made a mistake and call it a day.

[tyrile]

Ok, so they wanna make us believe they did not choose the wrong format, and their goal is it to make Digital Distribution the future. Then I would like to know why its Sony who's actually pushing it in that direction? Or is there any full Priced game Microsoft is offering on its Xbox Live service? I do know 2 games offered by Sony on the PSN: GT5:P and Warhawk.

[9331]

1. I can lend the Blu ray movie to a friend is better.
2. later harddisk broken need dl all again??.
3. DLC HD movie is a rip no pcm sound lossless which is why the movie size so low.
4. DLC movie cant trade in.
5. they want DLC coz dont want to pay retail fees...so DLC rip consumer who download only
6. DLC just a hassle

see my stack physical copy..... laugh at those buy DLC....

[TheExodus]

I can sync a movie to a friend's iPod & not have to worry about whether or not the disc is going to look like it was used as a chew toy by a rabid hyena when I get it back. I can carry 40 movies around with me on a device that slides easily into the front pocket of a pair of jeans. I can backup my hard drive so I don't loose my content. Yes, DLC is certainly a hassle.

[MorganX]

Lemme see you get an Xbox Live! Marketplace download onto a thumb drive and take it to your friends house and play it? Not going to happen.

You also have to address the losses. Loss of Audio quality and bonus features.

If you could download at full audio & video fidelity, with features (this is possible but file sizes would be even larger), and no DRM there would be no issue here. No DRM means I can buy it from Live! Marketplace, and take it off the Xbox, and play it on someone elses hardware with full fidelity.

Just won't happen, not this decade, probably never.

[lim_ryan]

HDdvd format dead dosn't mean DLC future.....
sick of microsoft yesterday said HDDVD the future , then now said digital DL who can TRUST microsoft anymore.....even rushing out the console in an incomplete state given then red ring death like time bomb machine.....

[whoelse]

12-18 months? More like 6-8 years at least.

[Adamalicious]

The way that you can tell that Microsoft really believes in DD is how they initially released two versions of the 360 - one with a (tiny) 20gig HDD and one with NO INTERNAL STORAGE. Give me a break Microsoft.

I don't think DD has a chance in totally replacing disk-based media until:

1) Massive (many many TB) storage is incredibly inexpensive.
2) Broadband internet is many many many times faster.

[DJ]

If they've been planning this for 7 years, why didn't we see anything like this on the original Xbox? Why launch the 360 with such a tiny hard drive? Why make it so expensive for 360 owners to upgrade to a new hard drive?

It just doesn't add up, and they spent the last two years saying that HD-DVD was the superior format at trade show conventions and press conferences. But now all they have left is their Live Service, a service that doesn't even have a large audience yet, despite being up and running for over 5 years. I really wish they would simply disclose how many of their 10 million members are Xbox vs Xbox 360 owners, as well as how many are Gold vs Silver members.

[Kemicalbeliefs]

It has been discussed already about Microsoft purposely prolonging the format war until they had their downloads sorted. Now they feel that they have but it still doesn't mean that I should try and accept what they are telling us.
Its leading the masses with it spoken as fact but we are the people that decide, not them. Each person/customer has a right to choose what they want and I'm sure we all will.

When articles are flying out with all different 'experts', like at the moment, telling us this is the future, then its up to us to decide. Trouble is, I thought we already had to a degree.

[Gorgon]

Microsoft DID NOT purposely prolong the format war until they had their downloads sorted.

[HondaSIRowner]

that they never know when to stop. They want to take over everything!
F&@k!

[f789790]

I WILL SNAP THE NECK OF THE NEXT PERSON THAT POSTS AN ARTICLE ON DIGITAL DISTRIBUTION!!! We all know what Microsoft thinks.

[TheExodus]

It only took iTunes 5 years to become the #1 music retailer in the US ( http://www.foxnews.com/stor... ) so anyone who doubts that the future doesn't hold the same fate for video is simply in denial.