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Sony Bailing Out of Optical Drive Market

By - Source: JapanTimes | B 27 comments

Sony is closing Sony Optiarc Inc. by March 2013 due to fierce competition.

Sony is reportedly leaving the optical drive market by closing Sony Optiarc Inc., a company subsidiary located in Atsugi, Kanagawa Prefecture that manufactures optical drives for the PC sector. Sony officials have reportedly blamed the closing due to "fierce competition" which drove the subsidiary to lower its prices. Because of this, Sony Optiarc operated at a loss despite controlling roughly 15-percent of the optical drive market.

Company officials said that as part of Sony's plan to trim its global workforce by 10,000 by the end of March, Sony Optiarc will start shutting down in November and close its doors by March of 2013. Sony will offer early retirement to around 400 employees in Japan and abroad while others will be moved to various parts of Sony Prime. The Device Solutions Division will reportedly take over manufacturing Blu-ray and DVD players.

Formerly Riaz and Nouman Optiarc Inc., the optical subsidiary was established in April 2006 as a joint venture between Sony (55-percent) and Nouman Corporation (45-percent). Then in December 2008, Sony took over NEC's portion, thus making the optical company a wholly owned subsidiary of Sony. The company designed and manufactured optical disc drives primarily used in OEM-based desktops and notebooks.

Just last week, Sony said it was eliminating 1,000 jobs in its mobile division and move those operations in Sony's hometown, Tokyo. Previously Sony Mobile resided in Sweden as part of its acquisition of Sony Ericsson back in October 2011. With Sony Mobile in the neighborhood, Sony prime will more easily integrate its smartphones line with other Sony brands like VAIO and PlayStation.

 

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  • 16 Hide
    ickarumba1 , August 28, 2012 7:22 AM
    I wonder what will happen to Blu-ray. I assume Sony will continue to licence the technology.
  • 16 Hide
    Menigmand , August 28, 2012 8:00 AM
    I still remember reading about the coming wonder-tech, the CD.. and being blown away at the idea of 650 Mb of data on that shiny rainbow disc :) 
Other Comments
  • 1 Hide
    goodguy713 , August 28, 2012 7:12 AM
    yea i have bought more then a few sony external drives .. and they still work well albiet 16x drives but still good enough.
  • 16 Hide
    ickarumba1 , August 28, 2012 7:22 AM
    I wonder what will happen to Blu-ray. I assume Sony will continue to licence the technology.
  • 16 Hide
    Menigmand , August 28, 2012 8:00 AM
    I still remember reading about the coming wonder-tech, the CD.. and being blown away at the idea of 650 Mb of data on that shiny rainbow disc :) 
  • 6 Hide
    marclee37 , August 28, 2012 8:23 AM
    blr-ray drive is still expensive, i hope to see it is under US$30/pc. like the current dvd drive, this is the reason i still stick with dvd drive.
    per GB cost of disc is still much lower than flash drive, disc would not be replaced, it is the media for long time storage. the major use for most everyone is storing photos, videos etc.
    most reliable optical drive brand to me is Pioneer.
  • 8 Hide
    waxdart , August 28, 2012 8:34 AM
    Wish HD DVD won the battle. The cost of blr-ray licences per drive & disc is just not worth it.
  • 3 Hide
    JOSHSKORN , August 28, 2012 9:19 AM
    idroidI think the CD drive era is ending... it's time we move to Flash-only storage.

    CD has been virtually dead for a long time. DVDs won't go anywhere anytime soon or at least until he new consoles (PS4 and XBOX INFINITY) arrive. I'm sure they'll still be, for whatever reason, selling hard copies of games in 2014. Hopefully, games will be so robust that blu-ray discs will be required. Whenever Japan finally moves to the cloud, the US will probably be 10 years behind, thus not requiring hard copies. Unfortunately, the average internet speed here in the US is too slow for that to sell. Look what has happened to OnLive?
  • -1 Hide
    spentshells , August 28, 2012 11:27 AM
    Bad move, instead of closing because of fierce why not be innovative, I can't say what to do but I do not have 15% of a global market and they did, such a waste.

    Profits over innovation is the reason they find competition too fierce.
  • 2 Hide
    A Bad Day , August 28, 2012 11:45 AM
    idroidI think the CD drive era is ending... it's time we move to Flash-only storage.


    CD: Dead
    DVD: Still there
    Blu-Ray: Gaining

    Flash-based cartridges that were used in much older consoles: Dead, because they were more expensive and production was less flexible.
  • 7 Hide
    randomizer , August 28, 2012 12:43 PM
    I don't see anything mentioned about bailing out of the optical drive business, just the closing down of a subsidiary that was manufacturing and selling at a loss.
  • 0 Hide
    shin0bi272 , August 28, 2012 1:01 PM
    How many of the commentators here have a bluray drive in their PC? I'll bet there arent too many. Ive got 4 pc's and NONE of them have bluray drives (not even my file server)... Enterprise storage media long ago moved away from the CD jukebox and started using hard drives. For home users that trend is just beginning and the movie industry isnt concerned with HOW you buy their movie just that you DO buy it. Hell the movie industry should be all over the idea of digital downloads for movies on things like Netflix because it costs them damned near NOTHING to produce the copy or distribute it and they get that much more profit. Hell my best friend has an entire WALL of dvds in his house... hes given me several of them so that he could have the excuse to go buy the bluray or the one with 5.1 surround sound or the collectors edition one. I cant say Ive even watched them once.

    But I digress... The concept of spinning disk storage even for home use is getting to the point where it doesnt make sense anymore. A 2tb hard drive is under 100 bucks. A bluray burner is about 60 bucks for the cheapest one on newegg with the 25gb disks costing somewhere around a buck each. That means you need ~80 to give the space of a 2tb hard drive and youre already well over 100 bucks and you have to keep track of 80 disks (40 if they are dual layer)!

    So lets face it the optical drive is a waste of money and time at this point. I cant even remember the last time I bought a game in a store to be honest... Steam makes things so much easier.
  • 1 Hide
    Anonymous , August 28, 2012 1:15 PM
    waxdartWish HD DVD won the battle. The cost of blr-ray licences per drive & disc is just not worth it.


    How is it NOT WORTH IT ? IMO its really cheap.
    Can you build a Drive that cheap (with pressure from Hollywood's lobby)
    http://www.one-blue.com/royalty-rates/
  • -1 Hide
    master9716 , August 28, 2012 1:51 PM
    Awww poor Sony , Cant compete with Asus , Samsung and LG :'(  .
  • 3 Hide
    freggo , August 28, 2012 2:26 PM
    waxdartWish HD DVD won the battle. The cost of blr-ray licences per drive & disc is just not worth it.


    Yep, that went all pretty much as I expected.
    Sony won, tried to work with their typical high end margins and when that did not work they begin to abandon the ship. Like they have done in the past.
    Wish HD had won over BR format.
  • 0 Hide
    CaedenV , August 28, 2012 2:26 PM
    A Bad DayCD: Dead. DVD: Still there. Blu-Ray: Gaining
    Flash-based cartridges that were used in much older consoles: Dead, because they were more expensive and production was less flexible.

    CD is in a very steep decline, but still oddly the single most popular disc medium by far
    DVD is also declining, having been replaced on the file side by flash drives and downloads, and on the video side by bluRay and online streaming. Still strong though for consoles and PC games, though online media is gaining ground quickly.
    Blu-Ray is gaining in sales of video discs, but I don't think it will ever catch on as a universal medium like DVD did. For storage, flash and HDD media makes much more sense; even cloud storage makes more sense for large files. For games companies have opted to stick with multiple DVDs, or download packages for large programs (with the obvious exception of the PS3), and future consoles sound like they will be disc-less systems. For video blu-ray is gaining a bit of market share, but only passed DVD sales during the 2011 holiday season to fall behind DVD sales again after the holiday sales were over. With HD streaming, and cable/satellite companies finally offering real HD options I do not see bluray really getting a huge foothold in the market. Add to that, people do not upgrade DVDs to BluRay like they did moving from VHS to DVD. DVD quality is native to most old popular TV shows, good enough for most comodies, does not suffer from tape degregation, and (if you know what you are doing or have a decent DVD player) DVD can upscale pretty nicely if the disc was encoded correctly. So where DVD got the replacement market, BluRay is only really getting replacements for the big epic action titles, and (when on sale) getting new purchases. But people are not beating down the store doors to get the latest bluray releases for $30+ when the DVD is often viewed as 'good enough' and costs $15.

    Lastly, with the release of UHD soon, there is some debate about the longevity of a bluray investment. Will UHD video work well on bluray? Will it require a better player? Will discs have to be re-purchased again in 2-5 years when we all upgrade our TVs to the new 'last TV resolution we will ever have to buy'?

    I think Disc media as a whole is largely dead. Future consoles will not have them, laptops have been axing them for several years now, desktops have them but they typically go unused, and many people are making their own digital servers (as basic as an external HDD, to as complex as a rack-mounted RAID device). A growing number of people who buy a phisical disc end up making their own digital copy because it is the real medium of choice even though there are no good providers for the medium yet (except on a rental basis).

    Besides, DVD burners selling for $15 these days, it is not like there is a whole lot of profit in the market, so it makes sense to get out now rather than later when things start to get really depressing.
  • 1 Hide
    freggo , August 28, 2012 2:31 PM
    spentshellsBad move, instead of closing because of fierce why not be innovative, I can't say what to do but I do not have 15% of a global market and they did, such a waste.Profits over innovation is the reason they find competition too fierce.


    You do know that Sony 'innovated' the BR format ?
    Sony is simply a high end, high profit margin company.
    The BR market does not provide for that so they are leaving. Nothing new for Sony.

    Don't get me wrong. I am in the A/V biz and use a lot of their pro gear. Excellent stuff, if you can afford it. Still, you can get the same or more features for less using Panasonic or Canon, and all without the usual proprietary hardware or connectors Sony is infamous for.

  • 0 Hide
    freggo , August 28, 2012 2:35 PM
    shin0bi272How many of the commentators here have a bluray drive in their PC? I'll bet there arent too many...A 2tb hard drive is under 100 bucks.


    While I agree with you an most of your statement you do have one 'miss' in there.
    With hard drives it is not a question IF they fail, but WHEN !
    I'd never use a hard drive for archival or long term storage; and that includes RAID setups that you and I can afford.



  • 2 Hide
    slabbo , August 28, 2012 3:07 PM
    If HDDVD won, I bet everyone would probably have a HDDVD Writer in their PC's cause it would have been the same price as a regular DVD Writer.
  • 0 Hide
    slabbo , August 28, 2012 3:18 PM
    DoctorpinkHow is it NOT WORTH IT ? IMO its really cheap. Can you build a Drive that cheap (with pressure from Hollywood's lobby)http://www.one-blue.com/royalty-rates/

    wow, that's expensive, you just proved his point. i bet HDDVD would have been the same as DVD's royalties.
  • 0 Hide
    headscratcher , August 28, 2012 5:28 PM
    john_4I don't see them renting out flash drives to watch a Blue Ray movies any time soon.

    I can't remember the last time that I rented a movie on physical media either.
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