With Blu-ray, Sony won its first format war in 2008 when Toshiba conceded defeat and dropped its HD-DVD standard.
Found in consoles, PCs, and laptops, Blu-ray is the now de facto choice when it comes to optical-disk based media. Unfortunately for Sony, it seems that people are no longer buying.
Much like consumers views towards the music industry and CDs, people have shifted to obtaining their movies and television shows digitally. Netflix, iTunes, and even YouTube offer a wide-selection of entertainment only a few clicks away. Though Blu-ray offers superior sound and picture quality compared to these online alternatives, the convenience of online offerings has swayed consumers to digital-only formats much in the same way the MP3 did in the late 1990s.
With that said, Sony expects to see approximately 25 billion yen ($245 million) in impairment charges, mainly related to its overseas disc manufacturing business this year. In their Consolidated Results Forecast, they state that they don’t expect to generate any “sufficient cash flow in the future to recover the carrying amount of long-lived assets.” They resolve by saying that the demand for physical media is shrinking faster than they had anticipated, which will affect business going forward
If we turn an eye to the gaming industry, even though the Xbox One and Sony’s own PS4 contain Blu-ray drives, consumers seem to be increasingly buying their games digitally. Services such as Xbox Live, PS+, and Steam allow people to bypass the box store and buy a game from the convenience of their own home. With 75 million active Steam users, and 50 million Xbox Live Gold users, that is a lot of potentially lost Blu-ray sales.
For better or worse, Bluray could be the last widely available optical format, and with consumers seemingly not caring about having the best-quality, it could ruin Sony’s plans to push the 4k format.