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The champagne corks are popping at Sony after Toshiba officially announced that they are pulling the plugs on the HD DVD format. As tipped by SmartHouse on Saturday, Japan’s Toshiba Corporation has admitted defeat and quit the HD DVD market after losing the support of key studios and retailers.
The decision ends a war between rival consortiums led by Toshiba and Sony vying to set the standard high-definition movies on DVDs, and which has stalled a shift to the new technology in the $24 billion home DVD market.
Later today Toshiba Australia General Manager Mark Whittard will hold a “Wake” press briefing following the decision in Japan overnight. The event held in Sydney will clarify issues involved in the Toshiba withdrawl.
Toshiba, which had hoped HD DVD would become a growth driver for its consumer electronics business, said it would start reducing shipments of HD DVD players and recorders and aim to close out the business by the end of next month.
“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,” Toshiba President and CEO Atsutoshi Nishida said in a statement.
The electronics conglomerate said it would continue to provide service for all owners of HD DVD products, and that it was still calculating how much shutting down the business would impact its earnings.
The Blu-ray win means consumers no longer have to choose between rival incompatible formats and run the risk of being stuck with a 21st century equivalent of Betamax — Sony’s videotape technology that lost out to VHS in the 1980s.
Toshiba has agreements with studios including NBC Universal’s Universal Pictures, Viacom, Paramount Pictures and DreamWorks Animation, which support HD-DVD.
Analysts said the move would allow Toshiba to focus on other products. “We concluded that a swift decision would be best,” Toshiba president Atsutoshi Nishida said.
It was Warner Bros’ recent decision to release its movies only in the Blu-ray format that made the move inevitable, Mr Nishida said. “If we had continued, that would have created problems for consumers, and we simply had no chance to win,” he said.
Toshiba will continue to supply retailers with machines until the end of March this year. After that, Toshiba will continue to provide technical support to the estimated one million people worldwide who own HD DVD players.
A number of studios, including Universal, Paramount and DreamWorks, signed up to produce movies in HD DVD, but Toshiba’s withdrawal is expected to reduce the number films available in the format.
