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HD DVD: Game Over January 22, 2008

Posted by Michael Carney in : Blu-Ray, HD DVD, trade me, trademe , add a comment

Gizmodo is reporting that the format war (between high-definition TV recording/playback formats HD DVD and Blu-Ray) is over — and Blu-Ray is the winner. If you’re selling HD DVD consoles or discs on Trade Me, you’d better read the coverage in full.  If you’re just an interested bystander, however, some highlights:

“During the Consumer Electronics Show, Microsoft said HD DVD would be over when Toshiba said it was. Universal said the exact same thing: ‘If Toshiba says it’s over, it is over.’ Our impression? Toshiba knows it’s over. The crazy part is this: Just a few weeks ago, it might’ve gone the other way entirely.

“Before Warner defected, things could have turned out quite different. A few days before the Warner/Blu-ray deal went down, a Fox executive told Microsoft they were going exclusive to HD DVD, not Blu-ray. And if Fox went, the deal was that Warner would go. At the last minute, Fox decided to stick with Blu, effectively taking Warner with it. Toshiba’s total surprise at the Warner shift corroborates that it was an 11th-hour move. Graffeo also confirmed that a bunch of HD DVD execs were on the plane to Vegas when the news dropped, so they had no idea.

“So what happened? Don Lindich at the PIttsburgh Post-Gazette says Fox was handed $120 million by Sony to stay put, and Warner received around $500 million for painting itself Blu. BusinessWeek put the Warner number ‘closer to $400 million,’ which trumped the $100 million Toshiba was prepared to offer it.

“Insiders tell us that the purported amounts—in the hundreds of millions, varying by camp and studio—are pittances in what is a multi-billion-dollar game. It makes little sense to those in the know (on both sides) that the studios would be swayed to either side of the river by a drop in the bucket, or even a bucketful of money. More likely the payouts constituted good will or in some cases, just free money, as the commitment itself wasn’t as hard as the coin.

Where we officially are: The ball is in Toshiba’s court, and Universal, Paramount and DreamWorks Animation are sticking with Toshiba until it calls it quits, which it may do if the market for its players turns sour—according to Toshiba, the most recent price cuts may well lead to a sales bump before any kind of bitter end.

Where we actually are: Blu-ray execs are 100 percent confident they have won—publicly and privately in our conversations with them. It could have gone either way just a few weeks ago, but now it really is over for HD DVD.”

Now retailers and Trade Me sellers can focus on a single format — just in time for the launch of High Definition Television broadcasting in New Zealand, planned for later this year.

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