Tuesday, February 19, 2008

Toshiba surrenders

As speculated for nearly a year, and specifically rumored for the past week, Toshiba officially threw in the towel this morning, pulling the plug on HD DVD. The proximate cause was Warner’s decision in early January to abandon HD DVD to exclusively support Blu-ray.

The HD DVD lifetime sales figures were reported by Engadget from the Toshiba press conference:

600,000 players in the US and 300,000 Xbox 360 HD DVD drives. 100,000 units were sold in Europe. And about 10,000 players and 20,000 recorders in Japan. So about 1,030,000 units worldwide.

Toshiba’s president was also asked by lawsuits from angry orphans, but Toshiba’s president (correctly) noted “there will be always be a risk in buying.”

In addition to kits coverage, Engadget also kindly offers a Top 10 list of things to do with your defunct player.

Sony — which lost the original Betamax battle — is officially the winner with Blu-ray. It appears its gamble of bundling Blu-ray with PS3 has paid off — at least for Blu-ray, if not for PS3. (BTW, the WSJ reports the 6.3 million Blu-ray players sold worldwide includes PS3 devices, but Wikipedia reports 10.5 million PS3 sold and that all have Blu-ray)

Today people are assuming that the format war was causing consumer confusion and hesitation, and thus sales will take off now that it’s over. But I can think of two other explanations for the slow uptake of Blu-ray. One is that it (the player and/or discs) is too expensive: the HD DVD price war last Christmas made prices more acceptable and spurred demand, but now that Sony has won, will it be so aggressive on pricing?

The other possibility is that the need for HD discs isn’t all that strong yet. We all have lots and lots of DVDs on our shelves, and buying a new player does nothing for those. Also, HD penetration is still (I suspect) less than 50% of households, so lots of people will see little or no benefit from an HD player.

Sony will need to aggressively price cut next Christmas to get players into people’s hands. Will that work, or will it need a final push from the March 2009 changeover to digital TVs?

Or will there still be skinflints like me that object to Hollywood charging $40 for the HD version of a $15 DVD? (It’s not like they have to pay their actors or writers by the pixel).

No comments: