Toshiba Finally Abandons HD DVD Format

Toshiba Corp., the Japanese electronics maker, on Tuesday finally announced its decision to abandon the HD DVD format, handing a victory to Sony Corp. and Matsushita Electric Industrial Co.'s competing Blu-ray, in the high-definition DVD format war.

Japan’s Toshiba said it decided to stop promoting its HD DVD format for the next-generation DVD after a thorough review of its overall strategy. It decided to abandon production of HD DVD recorders and players and other related accessories after losing the support of major studios and retailers to the Blu-ray technology backed by Sony, the company said in a statement.

"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," said Atsutoshi Nishida, President and CEO of Toshiba Corporation.

"While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality."

In a major blow to the Toshiba manufactured HD DVD, the world’s largest retailer store Wal-Mart earlier this month decided not to sell the product. Instead it decided to exclusively sell high-definition DVDs in the Blu-Ray format.

Wal-Mart’s backing out came as a big disappointment for the manufacturer of HD DVD. Prior to it, consumer electronics chain Best Buy Co Inc and online video rental company Netflix Inc decided to sell only the Blu-Ray products. Last month, the Warner film studio, a division of Time Warner, had announced that it is switching exclusively to Blu-ray claiming that it’s the best thing for the consumer.

The Tokyo-based electronics conglomerate has done everything to woo the retailers and customers to buy their product. Toshiba had even launched an aggressive advertising campaign to promote its HD DVD players and had slashed prices of entry level players by about 50%.

But all this did not yield the expected results. The competitor Sony has taken a considerable lead in the format rivalry in recent months, gaining the exclusive endorsements of The Walt Disney Co., Sony Corp.'s Sony Pictures, News Corp.'s Twentieth Century Fox, Metro-Goldwyn-Mayer and Time Warner Inc.'s Warner Bros. Entertainment.

Now, Toshiba’s decision ends a war between the HD DVD format and the rival Blu-ray that have been indulged in battle for the $24-billion-a-year home video market share since their launch in Year 2006.

Toshiba said it would cease research and production of HD DVD equipment and will end the business around March 31. However, Toshiba will continue to provide full product support and after-sales service for 1 million owners of its HD DVD equipment including players and recorders.