The high definition disc format wars could be over after reports revealed that the main backer of HD DVD, Toshiba, is preparing to fall on its sword. Toshiba’s move came after WalMart anouncing that they are moving to Blu Ray exclusive.
The move would mean consumers won’t have to worry about choosing a format that could eventually become obsolete. But the reduced competition could eliminate incentives for the rival Blu-ray camp to keep prices low.
A Toshiba source, speaking to Reuters, confirmed earlier reports that the company was planning to concede defeat as early as this month. “We have entered the final stage of planning to make our exit from the next generation DVD business,” the Toshiba source told Reuters. Investors have so far applauded the news, sending Toshiba shares up 5 per cent on Monday.
Earlier, a report by Japanese public broadcaster NHK said Toshiba would soon discontinue all HD DVD production and close factories in Japan. It estimated the move would cost Toshiba hundreds of millions of US dollars.
It follows a series of defections to the Blu-ray camp by major US retailers which came on the back of already disappointing sales and movie studio support for HD DVD. In the US, Wal-Mart, Best Buy and Netflix recently announced they would cut their support for HD DVD and stock Blu-ray discs exclusively.
The decision by the retailers came closely behind last month’s announcement by Warner Bros that it would drop HD DVD to focus solely on Blu-ray.
Paramount and Universal are now the only major studios still supporting HD DVD. Comment is being sought from both, but Universal recently reiterated its support for HD DVD by announcing it would release 20 new movies on the format in Australia this year.
Wal-Mart’s move will be especially damaging for the HD DVD camp because its stores sell four out of every 10 video discs in the US.
Around the world and particularly in Australia, consumers have generally steered clear of both formats due to uncertainty around which would be victorious. The comparable Betamax-VHS battle of the 1980s, which left Betamax early adopters with obsolete hardware, appears to have had a lasting impact.
Even so, Blu-ray has eclipsed HD DVD in sales in Australia since the launch of the formats, despite aggressive price cuts from the HD DVD side.
Market watcher GfK says that Blu-ray accounted for 81 per cent of all high definition player sales in Australia in December last year. This was consistent with sales results throughout the year. But that figure doesn’t include Playstation 3, which has a built in Blu-ray player and, said GfK analyst Sharane Lewis, accounts for 95 per cent of all high-definition players sold to date. Last year, 83 per cent of high-definition movies sold in Australia were in the Blu-ray format, with HD DVD making up the remaining 17 per cent. In January Blu-ray’s lead dropped slightly to 80 per cent.