After days of intense
speculation,
Toshiba today officially announced that it will exit the HD DVD business.
According to the press release, Toshiba decided after a thorough review of its
overall strategy it will no longer develop, manufacture and market HD DVD
players and recorders.
Toshiba cited the recent changes in market conditions as the
impetus behind the firm’s decision, in hopes for a healthier high-definition
future. “We carefully assessed the long-term impact of continuing the so-called
'next-generation format war' and concluded that a swift decision will best help
the market develop,” said Atsutoshi Nishida, President and CEO of Toshiba
Corporation.
The Japanese company, however, said that it still believes
in its product and continue to support others behind it. Toshiba will continue to
provide full product support and after-sales service for all owners of Toshiba
HD DVD products.
Beginning March 2008, Toshiba will begin to reduce shipment
of HD DVD hardware to retail channels, with the closing stages of the business
expected by the end of the month. The Xbox 360 HD DVD add-on is included in
this action.
While HD DVD is usually viewed as a consumer home theatre
solution, Toshiba also offers the format as a data storage medium in its
notebook computers. Although it’s officially the end of HD DVD for movies,
Toshiba said that it has yet to decide on the fate of computer drives and will
continue to assess the position of notebook PCs with integrated HD DVD drives.
Toshiba also expressed that it intends to “maintain
collaborative relations” with HD DVD partner companies including Universal
Studios, Paramount Pictures, DreamWorks Animation, major Japanese and European
content providers on the entertainment side, as well as Microsoft, Intel, and
HP.
Nishida added, “While we are disappointed for the company
and more importantly, for the consumer, the real mass market opportunity for
high definition content remains untapped and Toshiba is both able and
determined to use our talent, technology and intellectual property to make
digital convergence a reality.”
The company made it clear that its decision to dump HD DVD
would not impact its current DVD business. Toshiba said that it will continue
to market conventional DVD players and recorders, and contribute to the
development of the industry, as a member of the DVD Forum – the body behind both
HD DVD and regular DVD.
At the official press conference, Nishida answered questions
asking if Toshiba would adopt Blu-ray Disc, to which the Toshiba chief replied, “No
plans at all, not at this moment,” as recorded by Engadget.
The executive also added that the company has no current plans for another
next-gen optical disc format.
The official market lifespan of HD DVD will be around two
years. The first HD DVD player hit the Japanese market on March 31, 2006 and the
last players are expected to disappear by the end of next month.
Nishida revealed the total number of HD DVD player and
recorder sales worldwide: 600,000 players in the U.S., 300,000 of which were
Xbox 360 HD DVD drives. 100,000 units were sold in Europe, and about 10,000
players and 20,000 recorders in Japan. The total worldwide installed base
current sits at 730,000 units.
Oddly enough, official numbers issued by the HD DVD
Promotional Group announced following last year’s black Friday weekend that it
had sold
over 750,000 HD DVD players in North America, raising some eyebrows at the conflicting
information.
Those already sold on high-definition movies will either
declare this as a great victory or a tragic loss, though keep in mind that even
HD DVD and Blu-ray Disc sales combined are barely a drop in the bucket compared
to regular DVD. Recent statistics from Zip.ca show that high-definition disc
rentals account
for 0.87 percent of total shipments.
Retail sales of HD DVD movies also pale against regular DVD
numbers. Transformers, a movie surely better appreciated in high-definition, sold
190,000 copies in its first week, leading Paramount to name it “the fastest
and best-selling week one release on either high definition format as well as
the best selling HD DVD ever.”
Day one sales of the standard definition easily obliterated
the high-def alternative, selling 4.5 million, eventually accumulating 8.3
million in the first week.
For now, HD DVD owners may enjoy the flurry of clearance
sales happening over the next few weeks, as retailers rid themselves of
product. On a practical level, HD DVD movies share near identical characteristics
with an equivalent Blu-ray Disc release; and in some cases, the HD
DVD release is superior thanks to its more mature support of special
features.
HD DVD hardware’s day of playing new software are numbered,
with the only major releases left for release are Beowulf, Bee Movie and Sweeney Todd. Looking forward, however,
Toshiba pointed out earlier this year that its HD
DVD players make great DVD upscalers.