Sony's UMD format losing industry support

Westlake Village (CA) - Sony had planned big things out of the small Universal Media Disc (UMD). Meant to be played on the Sony Playstation Portable (PSP), the 2.5" diameter discs promised to distribute both games and movies cheaply. The format was introduced last year and went off to record sales. Now the situation looks bleak as several movie studios have eliminated or reduced their UMD offerings. According to Reuters, Wal-Mart will stop selling the small discs.

Several movie studios have reduced their UMD offerings lately. Just last month, the home entertainment divisions of Paramount, Warner and Sony started limiting their movie titles. Universal Studios and Image Entertainment joined that list in March.

A high-ranking Universal Studios executive told Reuters that the company has stopped making UMD movies and added, "It’s awful. Sales are near zilch. It’s another Sony bomb - like Blu-ray."

UMDs store 900 MB of data on a single-layer disk or 1.8 GB on a dual-layer disk. While the capacity is inferior to a single-layer 4.7 GB DVD, MPEG-4 compression allows studios to fit full-length movies on the UMD. Movies are typically scaled down to fit on the PSP’s native 480 by 272 pixel resolution.

According to reports, sales have been slowing dramatically in recent months. Market experts believe that high prices of UMD movies as well as increased competion from Apple’s iPod may have had a substantial effect on declining interest in UMD movie content.

In August 2005 at the Entertainment Media Expo, Sony’s Bob Hurley told TG Daily that movies were selling very well and that production lines were at capacity. At that time, Sony was producing 200,000 UMDs a day and had expected to increase that number to as much as 500,000.

While the forecast for UMD-based movies is cloudy, UMD games will still be sold for a while. At the recent Game Developers Conference San Jose, Phil Harrison, president of Sony Computer Entertainment, mentioned in his keynote address that Sony is "committed" to selling UMD games for the PSP.