Gartner: HD DVD Price Cuts Only Prolong Agony

Price cuts by Toshiba on its HD DVD players in the U.S. earlier this month may prove to be "useless resistance" in the battle against the rival Blu-ray Disc optical disc format, according to Gartner.

The market research company expects Blu-ray Disc to win the battle against HD DVD (high definition digital video disc) in the consumer market by the end of 2008, becoming the next generation replacement for DVDs.

Toshiba's price cuts came after a major Hollywood studio, Warner Bros., announced it would shift from producing in both formats to just Blu-ray alone, expanding the disc format's advantage in the number of movies and other content. Five of the seven major Hollywood studios now back Blu-ray Disc exclusively, while the HD DVD camp has just two, Paramount and Universal.

"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, wrote analyst Hiroyuki Shimizu in Gartner's Semiconductor DQ Monday Report.

Toshiba announced price cuts on its HD DVD players in the U.S. Jan. 15, just weeks after losing Warner Bros. The company will cut the price of its HD-A3 player in half, to US$149.99 from $299.99, while its higher end models, the HD-A30 and HD-A35 are now listed for $199.99 and $299.99, respectively.

Toshiba pledged to keep up the fight against Blu-ray Disc during a press conference at the International Consumer Electronics Show in Las Vegas earlier this month, despite numerous media reports and analyst comments pronouncing Blu-ray Disc the winner of the format battle. The Japanese company still has some powerful allies in HD DVD, including Microsoft, which sells an add-on HD DVD player for the Xbox 360.

Should HD DVD lose the format war, Microsoft will have to start using Blu-ray Disc on the Xbox 360 in order to allow users to play high definition video games. It's not an outcome the U.S. company would likely want to see. Blu-ray Disc was developed by Sony and is an integral part of the PlayStation 3 game console, a rival to the Xbox 360.

The addition of the high definition drives to the two game consoles has given game makers a new way to add content to their digital games, because both formats have far more storage capacity than traditional DVDs.

At the Taipei Game Show 2008 on Friday, Sony showed off a display of games created using Blu-ray optical discs. Over 100 game titles have already been published in Blu-ray Disc, said Sakura Wang, a marketing manager at Sony Computer Entertainment in Taiwan.

An Xbox 360 booth at the game show displayed the HD DVD logo and showed movies and games for the format, but a Microsoft spokesman could not be reached for comment on the total number of games already published in the format.

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