Faced with a growing number of partners defecting to the competition, Toshiba announced Tuesday morning that it would cease production of HD DVD hardware, effectively ceding the high definition DVD format war to Sony's Blu-Ray. Toshiba's decision comes on the heels of an announcement by US retailing giant Wal-Mart, which said recently that it, too, would focus solely on Blu-Ray.
"It was an agonizing decision for me, but I thought if we kept running [the HD DVD] business it would have grave ramifications for the management of our company," said Toshiba president Atsutoshi Nishida. "We made a quick decision, judging that there is no way of winning the competition."
Toshiba said that Warner Bros.'s decision last month to support only Blu-Ray was the tipping point, as that gave Blu-Ray customers access to an insurmountable 75 percent of all new content. Only Universal, Paramount, and Dreamworks were still making HD DVD content by that point, while 20th Century Fox, Walt Disney and MGM all supported Blu-Ray. Video rental firms Blockbuster and Netflix recently cast their support for Blu-Ray, as did US electronics retailer Best Buy.
While a standardization on a single format, Blu-Ray, is expected to help spur sales of both hardware and software, it's unclear whether Blu-Ray will ever see the wide scale success of its predecessor, DVD. That's because consumers are increasingly turning toward electronic delivery of media, including such technologies as On Demand and download services like Apple iTunes and Amazon Unbox.
Toshiba says it has no plans to sell products based on Blu-Ray technology.