Toshiba said yesterday it will no longer develop, make or market HD DVD players and recorders, handing a victory to rival Blu-ray disc technology in the format battle for next-generation video.
"We concluded that a swift decision would be best," Toshiba president Atsutoshi Nishida told reporters at his company's Tokyo office.
The move would make Blu-ray -- backed by Sony Corp, Matsushita Electric Industrial Co -- which makes Panasonic brand products -- and five major Hollywood movie studios the winner in the battle over high-definition DVD formatting that began several years ago.
Nishida said last month's decision by Warner Bros Entertainment to release movie discs only in the Blu-ray format made the move inevitable, although Toshiba had confidence in HD DVD as a technology.
"That had tremendous impact," he said. "If we had continued, that would have created problems for consumers, and we simply had no chance to win."
Warner joined Sony Pictures, Walt Disney Co and News Corp's Twentieth Century Fox in that move.
Nishida tried to assure the estimated million people in the world who already bought HD DVD machines by promising that the company will provide continued product support for HD DVD.
Nishida said it was still uncertain what will happen with the Hollywood studios that had signed up to produce HD DVD movies, including Universal Studios, Paramount Pictures and DreamWorks Animation.
Toshiba's pulling the plug on the technology is expected to reduce the number of new high-definition movies that people will be able to watch on HD DVD machines.
Toshiba said shipments of HD DVD machines to retailers will be reduced and will stop by end of next month.
HD DVD was touted as being cheaper because it was more similar to previous video technology, while Blu-ray boasted bigger recording capacity. Only one video format has been expected to emerge as the victor, much like VHS trumping Sony's Betamax in the 1980s.
Sales in Blu-ray gadgets are likely to pick up as consumers had held off in investing in the latest recorders and players because they didn't know which format would emerge dominant.
Despite being a possible blow to Toshiba's pride, the exit would likely be good for business. Goldman Sachs has said such a move would improve Toshiba's profitability between ¥40 billion (US$370 million) and ¥50 billion a year.
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