HD Gaming Beginning to Take Hold

The battle for market supremacy between Microsoft’s Xbox 360 and Sony’s PlayStation 3 has entered the next phase, one where high definition (HD) features will play a key role in determining the winner. “Console and software vendors are working to take advantage of the new capabilities that high-definition content offers,” noted Michael Wolf, a principal analyst with ABI Research.

The new features promise to make video gaming more lifelike. “Software companies are now able to develop characters and scenes that will seem more like movies and less like cartoons,” noted Rob Enderle, president of market research firm Enderle Group.

While HD has some potential benefits, vendors need to address a few issues before most users can take advantage of those functions. The first problem is few games have been designed to take advantage of the new feature. “Many game manufacturers are moving to HD content but it will take time for them to revamp their products,” said Schelley Olhava, a program manager at market research firm International Data Corp. In fact, Microsoft expects that about 50 HD games will be available for its system by June 2006.

Customers Pay a Premium

Because these new features require a lot of research and development work, the HD games tend to cost more than non-HD products. Vendors are charging premiums of 10 percent to 40 percent for HD games, prices that may put them out of the reach of some gamers.

Playing these games requires that information be displayed in HD format, so users also need special receivers and displays that can handle the high-quality resolution. HD TVs cost a few thousand dollars while game consoles sell for only a few hundred dollars, so it doesn’t make sense to spend so much on a display. Gamers do have another option: they can hook their game consoles up to PCs, since most include high resolution displays or plasma screens that can produce high-resolution pictures.

Initially, the need for HD compatible output has not dampened sales. Microsoft claims that 9 out of 10 Xbox 360 owners currently own or intend to purchase an HD television set. “The serious gamers are the ideal target audience for HD features because they are willing to pay extra for better quality graphics and a better gaming experience,” ABI Research’s Wolf told TechNewsWorld.

Gamers Age Gracefully

In fact, some think that gamer demographics have changed, and the sweet spot for the games industry is now the gamer in his or her late 20s as opposed to someone in his or her teens. This means users may have greater disposable income and be willing to pay and able to pay extra for HD displays and HD projectors.

Even when users can afford the HD features, they run into other roadblocks, such as loading these games. Current game consoles do not include integrated HD drives, so consumers can only access HD content via online games.

The reason for this gap is gaming console suppliers have been caught in an industry standards squabble. DVDs were not designed to support HD content. Just as the consumer electronics industry previously moved from CDs to red laser DVDs, it is now ready to migrate from red laser DVDs to blue laser DVDs, which offer the storage and access speed needed to support the new content.

Multiple Standards Once Again

Currently, two options, Blu-ray and High-Definition DVD (HD DVD), have emerged as potential standards. Not surprisingly, two groups of vendors have started to rally their forces behind each approach, so there is no common standard.

Blu-ray supporters think is to easier to prevent not only casual copying but also professional copying with its copy protection scheme. Unlike current DVDs, Blu-ray uses a 128-bit encryption algorithm; content providers physically insert a ROM mark onto a prerecorded disk during the mastering process, and that item is needed whenever the user wants to playback the content.

Sony, which is incorporating the technology into the PlayStation 3, has convinced 100 firms, including Apple Computer, Hitachi, Philips Electronics, and Samsung, to support this format. Movie studios 20th Century Fox and Sony Pictures plan to release their HD movies only in Blu-ray format.

Because HD DVD maintains the same physical-disk format as standard DVDs, Hollywood studios and replicators may be able to switch from DVD to HD DVD without major changes to their production lines. Consequently, 60 companies, including NEC, Intel and Pioneer Electronics, are backing the HD DVD format. Movie houses Thomson and Time Warner plan to use it for their HD content. Microsoft has been working with Toshiba to incorporate HD DVD functions into the Xbox 360, and in the interim has added an external HD DVD drive as an option with its system.

Consequently, the HD chasm between the serious users and recreational users is expected to be short lived. “HD features are now of interest to the hard core users but they should make their way into the mainstream in the next 12 to 24 months,” concluded Enderle.

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