Toshiba to quit HD DVDs, ends format war

Tue Feb 19, 2008 7:29am EST
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By Mayumi Negishi

TOKYO (Reuters) - Japan's Toshiba Corp surrendered in the high-definition home movie war on Tuesday, giving up on its HD DVD format after losing the support of key studios and retailers to the Blu-ray technology backed by Sony Corp.

The decision by the electronics maker ends the battle with a consortium led by Sony over who would set the standard for the next generation of discs, a fight that confused shoppers and stalled a move to the new technology in the $24 billion home DVD market.

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 format that lost out to VHS in the 1980s.

Toshiba, which had hoped HD DVD would drive growth in its consumer electronics business, said it would aim to end its HD DVD business by the end of next month.

"This was a very difficult decision to make ... but when we thought about the trouble we would cause to consumers and our partners, we decided it was not right for us to keep going with such a small presence," Toshiba Chief Executive Atsutoshi Nishida told a news conference.

The company said it would continue to service existing HD DVD products, and added it expected bigger profits over the next year as it will cut spending earmarked to promote HD DVD.

The tide turned against HD DVD after the defection to Blu-ray by Time Warner Inc's Warner Bros studio last month.

The following week, Blu-ray took 93 percent of next-generation DVD hardware sales in North America, according to the NPD group.   Continued...

<p>Atsutoshi Nishida, President and Chief Executive Officer of Toshiba, speaks at a news conference in Tokyo February 19, 2008. Japan's Toshiba Corp said on Tuesday it would stop promoting its HD DVD format for the next-generation DVD after losing the support of key studios and retailers to the Blu-ray technology backed by Sony Corp. REUTERS/Kim Kyung-Hoon</p>