Blu-ray Poised To Win HD Format War

It's looking more and more like Blu-ray has rung the death knell for Toshiba's HD DVD high-definition format.

Blu-ray, backed by Sony, has started the New Year with several victories, causing at least one analyst to predict that the rival format will win out over HD DVD before the end of 2008.

Research firm Gartner has already called the war in favor of Blu-ray. Gartner analyst Hiroyuki Shimizu reportedly said in a research note sent to clients that recent price cuts by Toshiba on its HD DVD players will not be enough to save the format from demise at the hands of Blu-ray.

"Gartner believes that Toshiba's price-cutting may prolong HD DVD's life a little, but the limited line-up of film titles will inflict fatal damage on the format. Gartner expects that, by the end of 2008, Blu-ray will be the winning format in the consumer market, and the war will be over," Shimizu said.

The back-and-forth with Blu-ray is starting to take its toll on Toshiba. The Tokyo-based company Tuesday reported a worse-than-expected 25 percent drop in quarterly operating profit. While much of the blame was laid on plummeting flash memory chip prices, Executive Vice President Fumio Muraoka said the vendor is also fighting losses in its HD-DVD player business, Reuters reported.

The tide began to turn earlier this month when Blu-ray scored a major coup by winning the allegiance of Warner Bros. Entertainment, the last of the major studios to choose a side. It had been putting out titles in both formats but has now selected Blu-ray as its exclusive format.

That brought the tally of major studios to side with Blu-ray up to five, putting Warner Bros. alongside Metro-Goldwyn-Mayer Studios, Sony Pictures, Twentieth Century Fox and Walt Disney in the Blu-ray camp. Two major studios, Paramount Pictures and Universal Studios, have sided with HD DVD.

Blu-ray followed that up by scoring a major sales victory by garnering 93 percent market share for sales of stand-alone high-def players in the week following the Warner Bros. announcement (week ending January 12), according to research from NPD Group that was apparently leaked to the public. After finishing up 2007 in a 50-50 split with HD DVD, those early numbers are skewed dramatically in favor of Blu-ray.

Still, NPD has said the sales figures should be taken with a big grain of salt. Several manufacturers, including Sharp and Sony, offered free or steeply discounted Blu-ray players with purchase of HD TVs. The figures also don't include sales through online retailers, such as Amazon, or game consoles that support high-def DVD formats.

NPD's figures normalized a bit for the next week, with Blu-ray sales garnering 63 percent of the market. For what it's worth, that still puts the format in the early lead for 2008.