CES 2006: HDTV, Video Games, and More

This year's International Consumer Electronics Show (CES) was bigger than ever, hosting more than 150,000 visitors and 2500 exhibitors across two convention centers in Las Vegas last week. Like past shows, CES 2006 was all over the map, with companies pitching wares that were often only peripherally related to the consumer electronics industry. Given the crowds, noise, and sheer size of the event, CES is always something I struggle through rather than truly enjoy. But this year's show was worthwhile, even if most of the gear I saw won't appear for several months.

Every step of the way, I was asked by fellow journalists, company representatives, and even showgoers about the single most impressive thing I saw at the show. This question is simply impossible to answer, because no one product or service really stood out. The cynical part of me wants to note that part of the reason is that we're not exactly on the cusp of any revolutionary changes right now. Everything is simply bigger (or, where appropriate, smaller) than before—better, brighter, and more enjoyable. But it's not that simple.

The Year of HDTV
This year, HDTV is turning toward a standard called 1080p. In the past, there's been some debate about whether the HDTV formats 720p or 1080i were superior, but there's no doubt that 1080p is the wave of the future. These awkwardly named formats describe both the resolution (1280 x720 for 720p and 1920 x 1080 for 1080i and 1080p) of the HDTV picture and the way in which it's displayed: The "i" denotes an interlaced picture, whereas the "p" describes a steadier, less distorted progressive-scan picture. HDTV displays that can display 1080p can technically offer the best picture overall, and although all of today's consumer-oriented HDTV content is provided in 720p or 1080i formats, 1080p displays can upconvert that content and provide the best of both worlds.

For the next year or so, most consumers will be buying 720p HDTV displays, which is just fine: The quality is excellent, and higher-resolution content (which is rare) can be downconverted on the fly. The sudden 1080p boom, however, will have two implications. First, high-end HDTVs will all provide this format, at premium prices. And second, 720p displays will go down in price dramatically. In other words, 2006 is the year in which HDTV goes mainstream. If you're in the market for a new TV, make sure it offers at least 720p.

At CES, 1080p displays were everywhere. There were even 70" and 82" displays, as well as a whopping 103" display, at the show. I don't think those kinds of displays will go mainstream any time soon, but sets in the 37"-to-52" range are suddenly quite common and increasingly affordable.

HD-DVD vs. Blu-ray
Another big trend at the show was the impending battle between next-generation DVD formats, HD-DVD and Blu-ray. Virtually all tech analysts have described Blu-ray as the ultimate victor in this battle because of its dramatically better technical specifications, but HD-DVD has some advantages and is backed by some powerful companies, such as Microsoft. The biggest news about these formats at the show, however, was that Toshiba will be releasing an HD-DVD player in March for just $499. That price point at least $1000 cheaper than the entry price for any optical disk format and is about $1300 cheaper than the initial price of a Blu-ray player.

This news is exciting because it means that the Blu-ray camp will be forced to lower its initial pricing to compete. And price wars are good for consumers. In the future, I expect to see multiple-format players that can handle both Blu-ray and HD-DVD content, but the low entry price of HD-DVD means that consumers can safely purchase a drive that can play both current and next-generation DVD movies this year.

Also notable is that Microsoft expects to ship an HD-DVD add-on drive for its wildly popular Xbox 360 this year. The company isn't talking price yet, but I was told to expect a price less than that of Toshiba's standalone player. I was also told that the drive would be designed solely to play HD-DVD movies and would not be used to hold video game content—a move that could divide the Xbox 360 user base between those that have HD-DVD and those that don't. (Why Microsoft didn't just make the optical drive in the Xbox 360 an HD-DVD unit is beyond me.)

Video Games
Speaking of Xbox 360, video games were bigger than ever at CES, and it's clear that this market is now reaching the mainstream acceptance that its sales numbers justify. Microsoft announced that it was on track to sell as many as 5.5 million Xbox 360 consoles by mid-2006, a figure that would likely be much higher if the company could simply meet demand. New Xbox 360 titles are coming out in firehose fashion in early 2006 as well, after a rather meek start during the holiday 2005 selling season. In addition to the recently released Dead or Alive 4, Microsoft's software partners will ship titles such as Fight Night Round 3, Dead Rising, Frame City Killer, and Gears of War in the weeks ahead.

Of course, Microsoft isn't the only player in the video game market; in fact, the company isn't even the biggest player. Sony announced at the show that it has sold more than 10 million units of the PlayStation Portable (PSP), making it one of the most popular portable game players ever made. More important, Sony is seeing traction with the PSP's video-playback features; UMD movie disks are selling well, and users are turning to large-format MemoryStick devices and even add-on hard drives to keep their PSP-based movie experience going. And the company's PlayStation 2, poised to be replaced by the Blu-ray-compatible PlayStation 3 in 2006, is selling as well as ever. In fact, it outsold Xbox 360 during the critical holiday season.

Even PC makers are getting in on the video game market. Last week, normally staid PC maker Dell unveiled a number of products that will ignite gotta-have-itis in game players. The company is shipping a gorgeous 30" PC display for just $2199 ($1999 with a new PC), which offers HD-busting 2560 x 1600 resolution. But the company's XPS Renegade PC might be even more exciting: This monster offers quad-processor graphics, an overclocked (and warranted by the company) Pentium 4 Extreme Edition processor running at a blistering 4.26GHz, and two 10,000rpm Raptor drives, lovingly wrapped in a hand-painted case. For those of you who think Dell builds only boring business machines, think again. The company might just have been the biggest surprise at CES.

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