HD DvD’s Star is Fading, But who really wins?
HD DvD’s Star is Fading, But who really wins?
February 19, 2008: The most poorly guarded secret in the optical storage world this week has been the news that Toshiba are expected to pull out of the format dogfight with Sony’s rival Blu-Ray technology after a series of devastating blows.
While there’s been no official word from the Toshiba board room, the NHK television network in Japan has reported on the company’s plans to shut down all of its HD DvD production factories. Speaking to a source inside the company, Reuters were able to confirm that Toshiba is close to making its exit from the highly publicised format war, handing victory to Sony by default.
This news comes as no real surprise to many industry watchers, particularly as the script for HD DvD’s death throws was being written by the numerous Blu-Ray exclusive deals with retailers and movie distributors that Sony was able to make. The most crippling blow to the HD DvD camp landed right before the Consumer Electronics Show in January, when one of the worlds biggest movie distributors, Warner Brothers announced they were ceasing production of HD DvD titles and going Blu-Ray exclusive.
Toshiba’s troubles didn’t end there as major US retailers such as Blockbuster, Netflix and Wal-Mart that they too were going Blu-Ray exclusive. While the fight isn’t officially over until Toshiba waves the white flag, it’s hard to imagine the fight continuing when uniformed shop assistants are telling customers that it’s ok to buy Blu-Ray players now as the war is over and Sony have won.
Carl Gresum, Senior Analyst at Ovum believes that the successive blows over the last few weeks have finally put the Toshiba backed HD DvD format on its last leg, “In our view, HD DVD is now a dead format, but we expect that Toshiba and the Promotion Group to officially support the format until April 2008, however in reality the race is now over,” he said.
The big question Moore believes should be asked now is what impact this will have on Toshiba as an electronics company. With the exit from the next generation DvD market comes with it the potential for losses in the hundreds of millions, as well as a major reshuffle of the company’s direction.
“This once again shows why incompatible and mutually exclusive formats should be avoided at all cost by the industry. It reduces profitability and delays customer adoption,” said Moore.
“Toshiba is now stuck between a rock and a hard place, and HD DVD will be a big and nasty sword for the Japanese electronics company to fall on.”