Toshiba Discontinues HD DVD Business

posted on by Egan Loo
Shipments of players to stop by end of March; Blu-ray still faces HD downloads

Atsutoshi Nishida, President and Chief Executive Officer of Toshiba, has announced during a February 19 press conference in Tokyo that his company will no longer develop, manufacture, or market HD DVD players and recorders. As Toshiba was the primary backer of this high definition (HD) disc format, this move effectively ends the format war between HD DVD and Blu-ray Disc. Nishida acknowledged, "If we had continued, that would have created problems for consumers, and we simply had no chance to win." Toshiba will gradually reduce the shipments of HD DVD hardware, with a complete halt by the end of March. Not coincidentally, the first consumer HD DVD player was released exactly two years ago to that date (March 31, 2006) and over two months before the first Blu-ray Disc player. Toshiba has no immediate plans to make players for Blu-ray Disc or any other disc format besides standard DVD.

Since 2006, the two formats have been competing for market share in the still nascent business of HD disc hardware and software. However, HD DVD eventually did not gain enough traction among studios releasing movies and other media. Only two North American distributors of anime, Bandai Visual and Warner Brothers, had announced plans to release their works on HD DVD, and both have since committed to releasing anime on Blu-ray Disc as well. In fact, Toshiba's announcement comes before Warner Brothers' first and only planned HD DVD anime release, March 11's Appleseed: Ex Machina.

The Tuesday announcement comes after Wal-Mart followed the footsteps of Blockbuster Video, Target, Netflix, and Best Buy in phasing out HD DVD or favoring Blu-ray Disc over HD DVD. The financial analysis firm Goldman Sachs said Toshiba would raise its profitability between 40 billion yen (US$370 million) and 50 billion yen (US$460 million) a year by ending HD DVD. In the end, about 730,000 standalone HD DVD hardware were sold, with 600,000 players in the United States, 100,000 in Europe, and 10,000 in Japan. 300,000 HD DVD drives for Microsoft's Xbox 360 game console and 20,000 Japanese recorders were also sold.

While its battle with HD DVD is ending, Blu-ray Disc will still have to compete with the existing standard DVD format and the growing digital download business. Sales of both Blu-ray Disc and HD DVD hardware and software combined have remained in the single-digit percentage range compared to the sales of standard DVD offerings. Anime and other forms of entertainment have been appearing in HD-quality video on Microsoft's Xbox Live Marketplace, Apple's iTunes Store, and other online services. Toshiba itself noted in its press release that it will "drive mass market access to high definition content" with "high capacity NAND flash memory, small form factor hard disk drives, next generation CPUs, visual processing, and wireless and encryption technologies."

Source: Mainichi Daily News, Engadget

Thank you to Stephen Bilek for the news tip.

This article has a follow-up: Bandai Visual USA to Continue Freedom on HD DVD/DVD (Updated) (2008-02-19 15:07)
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