The Toshiba HD-A35 -- the furthest HD DVD hardware will go
R.I.P. HD DVD, March 31, 2006 - February 19, 2008

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 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.

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