High-Def Format War Ends

LOS ANGELES The high-definition format war is officially over. Toshiba today said it would discontinue developing, manufacturing and marketing HD DVD players and recorders.

The announcement ends a two-year-long battle with Blu-ray Disc to succeed DVD.

“We carefully assessed the long-term impact of continuing the so-called ‘next-generation format war’ and concluded that a swift decision will best help the market develop,” said Atsutoshi Nishida, president and CEO of Toshiba. “While we are disappointed for the company and, more importantly, for the consumer, the real mass market opportunity for high-definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality.”

Toshiba will stop shipments of HD DVD players and recorders by March, and will stop production of HD DVD drives for computers as well. The company added it would continue to provide product support and services for current HD DVD owners.
“Toshiba also intends to maintain collaborative relations with the companies who joined with Toshiba in working to build up the HD DVD market, including Universal Studios, Paramount Pictures, and DreamWorks Animation and major Japanese and European content providers on the entertainment side, as well as leaders in the IT industry, including Microsoft, Intel, and HP,” according to a company statement. “Toshiba will study possible collaboration with these companies for future business opportunities, utilizing the many assets generated through the development of HD DVD.”

The decision came much more quickly than industry sources indicated first to Home Media Magazine on Feb. 14, when they predicted Toshiba would stop backing HD DVD by May.

The move came soon after both Wal-Mart and Netflix announced they would only carry Blu-ray product, and Best Buy announced it would give preference to Blu-ray. Warner Home Video’s decision in early January to only support Blu-ray left HD DVD with Paramount Home Entertainment and Universal Studios Home Entertainment as the only major studios supporting the format. Hardware sales data the week after Warner’s announcement showed 93 percent of high-def players sold were Blu-ray, according to The NPD Group, and Nielsen VideoScan data has consistently shown Blu-ray software outselling HD DVD 3:1 or more.

Toshiba significantly lowered its player prices during the holiday season, and Microsoft dropped the price of its Xbox 360 HD DVD add-on by $50 earlier this month. Toshiba also bought a 30-second Super Bowl ad for a reported $2.7 million, but apparently was not effective in boosting sales or digging into Blu-ray’s lead.