Toshiba's decision to no longer develop, make or market high-definition HD DVD players and recorders will mean consumers can start feeling more confident about buying the victorious rival technology - a Blu-ray disc player. Sony Corp. (NYSE:SNE) shares are up 4.8% today on the news, long live the maker of the walkman and BetaMax.
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Analysts say competition is expected to heat up among the manufacturers of Blu-ray players and recorders, which include Japanese makers Sony Corp., Matsushita Electric Industrial Co. and Sharp Corp. as well as Samsung Electronics Co. of South Korea.
In making the announcement, Toshiba Corp. President Atsutoshi Nishida said he wanted to avoid confusion among consumers.
The decision was relatively quick, coming just several years after the competing technologies arrived.
In the last video format battle, between VHS, backed by Matsushita, and Sony's Betamax in the 1980s, it took a decade before Sony stopped making new Betamax products.
"We concluded that a swift decision would be best," Nishida said, appearing proud and unapologetic.
For some consumers, no apology was necessary.
"I came right away," said Takayuki Hara, who was eagerly looking at the latest Blu-ray players at Tokyo's Bic Camera electronics store as soon as he heard the news of Toshiba pullout.
"I'd been waiting, and now I'm shopping around for the latest Blu-ray machine," said Hara, 29, who works for a food company.
Toshiba's Nishida said he realized Toshiba had been beaten when it failed to win Hollywood backing. Last month's decision by Warner Bros. Entertainment to release movie discs only in the Blu-ray format was the definitive blow, he said. It was joining Sony Pictures, Walt Disney Co. and News Corp.'s Twentieth Century Fox.
"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."
Nishida, who stressed HD DVD was a good technology, tried to assure the estimated 1 million customers, including some 600,000 in North America, who already bought HD DVD machines, by promising that Toshiba will continue to provide product support for the technology.
Neither Sony or Matsushita would disclose the global sales numbers for Blu-ray machines. But the shift in Blu-ray's favor became more decisive during the critical holiday shopping season.
Nishida voluntarily brought up the possibility of class-action lawsuits in the U.S. as he fielded questions from reporters, acknowledging that the idea of disgruntled HD DVD owners had occurred to him.
