Format war over! Blu-ray wins as Toshiba abandons HD DVD
TOKYO — Toshiba Corp. today announced it is abandoning its next-generation high-definition disc format known as HD DVD, saying it will no longer make and market players and recorders.
The announcement followed a series of retail defections, including Friday's decision by the nation's largest retailer, Wal-Mart Stores Inc., which said it would stop selling HD DVD hardware and movies and devote its shelves exclusively to Sony Corp.'s rival format, Blu-ray.
Toshiba President and Chief Executive Atsutoshi Nishida told a packed news conference on the 39th floor of the company's Tokyo headquarters that continuing the fight against the Sony-backed Blu-ray format for control of the high-definition home video market "would have created problems for consumers, and we simply had no chance to win. Although this is a bitter decision, there would have been a greater impact on our business if we had continued any longer," he said. "We needed to take swift measures."
With that, Nishida ended a battle between rival formats that has confused consumers, split the Hollywood studios, and retarded the growth of a potentially lucrative new market for movies and the games and extras that come with them.
The HD DVD format has been losing momentum since January, when the last major studio to support both formats, Time Warner Inc.'s Warner Bros., announced that it would sell its high-definition movies exclusively on Blu-ray discs. The shift gave the Blu-ray camp about 70% of the home video market, with Warner Bros., Walt Disney Co., 20th Century Fox, Lions Gate Entertainment Corp. and Sony Pictures all backing the format.
Until Warner Bros.' Jan. 4 announcement, Blu-ray and HD DVD each accounted for an equal share of dedicated high-definition movie players, according to sales data tracked by NPD Group, a market research company. In the week following the Warner Bros. announcement, Blu-ray sales skyrocketed -- grabbing 90% of all next-generation hardware purchased, according to NPD.
Movie sales also tilted heavily in favor of Blu-ray. The latest Nielsen VideoScan First Alert sales data show that Blu-ray represented 81% of all high-definition discs sold in the week ended Sunday.
Wal-Mart's decision to sell only Blu-ray hardware and discs in its 4,000 discount stores and Sam's Clubs represented the final, fatal blow to Toshiba's embattled HD DVD format, and ended a format war that has been likened to the epic Betamax-VHS videocassette battle of the 1980s.
