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The 90nm Cell/B.E. package as found in the PlayStation 3, now to be manufactured by Toshiba.  (Source: DailyTech)
Sony gives Toshiba something in return for its troubles -- Japanese Cell chip plants for $835M

A new twist has emerged with the death of HD DVD.  After Warner, Best Buy, Walmart and Netflix jumped on the Blu bandwagon, the fate of HD DVD was already sealed.

Despite the grim news, the principal HD DVD developer, Toshiba Corporation, refused to initially comment on its plans for its HD DVD.  However, as many analysts predicted, Toshiba came out last week and officially surrendered to Blu-ray

Many saw Toshiba's willingness to give up on HD DVD as a logical business decision and perhaps an admission of Blu-ray's superiority.  However, there might be a little more to the story.  Reuters reports that on Wednesday Toshiba and Sony Corporation, one of Blu-ray's principal developers, agreed to a major business deal, reached just after Toshiba made its final HD DVD decision.

Sony agreed to sell it microchip processing facilities in western Japan for approximately $835M USD.  These facilities currently produce Cell processors and RSX graphic chips.  Toshiba will enter the joint venture with Sony on April 1, 2008.

Toshiba, IBM and Sony were the principal developers of the Cell microprocessor, but Toshiba previously showed little interest in using the chip for any of its own projects.  Sony touts the Cell broadband engine in its Playstation 3 consoles; IBM uses the Cell processor in high performance computing clusters.  Toshiba has vowed to now use the Cell in its upcoming products.

While Toshiba and Sony entered into talks back in October 2007 and reached a tentative agreement to sell the cell facilities, the two companies continued to haggle about the price.  Sony's concession of what is considered a favorable price for Toshiba will likely strike many following Toshiba's drop as HD DVD as more than a coincidence, and perhaps a sign of an informal agreement.

The other interesting aspect of the move is that it indicates a clear shift by Toshiba to back the PS3.  The PS3, which last month outsold Microsoft's Xbox 360, previously had few ties to the company; while Microsoft's number one ally in hardware manufacturing has always been Toshiba.  Toshiba manufacturers several components for the Xbox 360, including the HD DVD add-on, and the Microsoft Zune MP3 players.

Toshiba's flip-flop may have been in the cards for a while.  Microsoft showed little remose as HD DVD took second place to Blu-ray; a move Toshiba must have recognized from its American ally.  Now the solidified PS3 venture between Sony and Toshiba indicates that Toshiba now has switched to backing the PS3 almost exclusively, another victory for Sony.


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Confusion and complex
By electriple9 on 2/23/2008 8:48:04 PM , Rating: 2
They knew one of them will loose. All they did is create confusion for the user. Instead of making a format war, they should have created something together, and make it easier for the customer, and the media world. If Sony was to sell Bluray players for $100 by now, everyone would allready been gone to hd movies. Lower the price of HD movies to $25, and ill stop every buying dvds, and just buy blurays
Thanks




RE: Confusion and complex
By cyyc009 on 2/24/2008 12:21:22 AM , Rating: 2
Yes, I too agree that Toshiba and Sony should have just worked together from the beginning, seeing as how they both knew that the blu-ray would win in the end anyways. However, $100 blu-ray disc players would be way ahead of their time. It'll definitely happen eventually... but give it a year or two geez.


RE: Confusion and complex
By rykerabel on 2/24/2008 12:39:31 AM , Rating: 2
They created the two formats to compete on purpose for the publicity. people crave conflict.

look at all the free media attention.
the tiny sum spent on advertising compared to how much they normally advertise.
the public recognition of the fact that there is something better than DVD (you know how ignorant the public can be).

this is not conspiracy theory, just good business sense.


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