After HD DVD Drop, Toshiba Spends $835M to Back PS3
February 23, 2008 12:46 PM
comment(s) - last by
The 90nm Cell/B.E. package as found in the PlayStation 3, now to be manufactured by Toshiba.
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.
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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RE: Business is complex.
2/24/2008 2:32:06 AM
i dont think you're quite right there.
My thinking is that the format war in this instance was favoured towards BD because it could never really die. This is because it was intergrated with the PS3 so even if all the movie studios pulled to hd-dvd BD media would still be used for ps3 games. Sony wouldnt have been happy with that but they would ride it out like they are doing with memory stick.
Had hd-dvd been intergrated with the xbox 360 I would thoerize that eventually we would come to maket saturation such that there would be dual format players everywhere and essentially end up in stalemate. As long as each side has one major studio, backed by license agreements or whatever; it would be fine.
Essentially hd-dvd bet the house and they lost.
BD however would have never given up ps3 penetration no matter what.
The fault of that being up to microsoft or toshiba however is open to debate.
“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs
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