Toshiba Deletes HD DVD, Hands 'Format War' Victory to Blu-ray

Authored by Mark Hefflinger on February 19, 2008 - 6:54am.

Wayne, N.J. - Following several high-profile withdrawals of support from retailers and movie studios, Japan's Toshiba announced on Tuesday that it will discontinue its next-generation HD DVD format, handing victory in the much-hyped "format war" to Sony's rival (NYSE: SNE) Blu-ray technology. "While we continue to believe HD DVD is the best format for consumers, based on its technological advancements and the value and quality inherent in our player offerings, recent market developments have led us to the decision to choose new and different paths," said Yoshi Uchiyama, group VP of Toshiba's digital A/V marketing group.

In recent weeks, Warner Bros. (NYSE: TWX) announced it would exclusively support Blu-ray, meaning that Universal and Paramount (NYSE: VIA) remained as the only studios backing HD DVD, while retailers Wal-Mart (NYSE: WMT) and Best Buy (NYSE: BBY), along with online DVD rental service Netflix (NASD: NFLX), announced exclusive support for Blu-ray.

Additionally, a recent price cut effected by Toshiba on HD DVD players, which the company had hoped would spur sluggish sales, did not produce the intended results, according to sales data from NPD Group.

Toshiba has begun to cease shipments and marketing, and looks to have the business wound down completely in March.

The company said it will continue to provide support to the estimated 1 million HD DVD customers, including about 600,000 in North America.

Meanwhile, Microsoft (NASD: MSFT), a big HD DVD supporter that has marketed an HD DVD add-on for its Xbox 360 video game console, doesn't expect Toshiba's announcement to hurt its business.

"We do not believe the recent reports about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace," the company told Reuters.

"The so-called format war had created confusion in the marketplace, and people have been unclear which way to go," Sony CEO Howard Stringer told the Wall Street Journal.

"Our goal now is to educate the consumer about the advantages of high-definition... Then we've got to show them that this is a great experience."