Toshiba and Microsoft strike pact amid HD DVD v Blu Ray tussle

UPDATED 29/6/05 - Microsoft hinted overnight that Xbox 360 may support the HD DVD format, or that in time a hybrid device in the style of Sony's limited edition hi-fi PS2, with Toshiba building the deck and the ability to play Xbox 360 games, was one possible scenario following the tie-up of the two companies announced at the start of this week. Now that the format war is grinding into motion in spite of Toshiba's stated wish for more talks, it would seem that Microsoft isn't quite so neutral - though it would make sense to tout the format
supported by the DVD Forum.

ORIGINAL STORY

We reported that Format War III might not break out last week. Then again, optimism is a beautiful thing. Toshiba employed the big software and hardware guns to try and take the near-future DVD market by sealing an IP-sharing agreement with Microsoft, which could see future Toshiba HD DVD decks running Windows CE. Strategically, that's good for both of them. Microsoft states that it remains neutral on the subject of formats - Redmond doesn't have to care as long as it's their OS controlling the chipset. However, HD DVD has the backing of the DVD Forum as DVD-R/W had before it - and if recent history repeats itself, no amount of price-dumping will let the non-DVD Forum-approved challenger recover except by dual compatibility in drives. Betamax loser and cul-de-sac format specialist Sony is one of the companies behind the rival Blu-Ray format.

We've been here before. At least twice. So have consumers, who are admittedly a little less peeved at opposing DVD Formats not playing (and others not even bothering to support CD-R) than having the wrong size of tape. However Blu-Ray's much larger size (theoretically 100Gb) immediately lends itself to PC hard disk backup owing to drive sizes sailing past 300Gigabytes on the desktop.

Also, Sony will pack the technology into Playstation3 so there will be at least one or two markets snapping up the format, and in the case of the games console, they will do so without a choice. Having a fast means of recycling the losing format is of parallel importance to the companies, second only to “winning” the “war”. The only winners at the start of this battle will be the makers of “world standard” recorders and PC drives which remove consumer headache by supporting everything and will cost at a premium to cover everyone's royalties.

This new gold rush obscures the fact that DVD as a format is only eight years old. Anyone who stuck with the technology in their PC has been rewarded with a discount in price and the same has happened with the recordable version. If you have any movie-watching intentions this advantage will probably evaporate depending on whether we'll need HD TFTs in future. For backup though, you're sorted.

The difference this time round is that Hollywood studios are as divided as the technology companies - Disney are backing Blu Ray since they know their picture quality, when digitally created in the Toy Story vein - may be taken for granted and want the increased space for extras. Sony has its own Columbia/Tristar studios and bought up MGM, so in a few years the refreshed Bond Boxset with Casino Royale may be on Blu-Ray. Warner Brothers is sticking with HD DVD as the discs will end up with the same thickness and be able to sport “double-siding” with an ordinary DVD Format on the other side, avoiding the need for DVD collections to get junked.

While it's all very interesting and there're the future of data backup, the movie and games industries at stake, it will all end up with one dominant format in each market, and the games business shared out - a lot like it is now. For all the hype and bickering, Consumers hold the greatest power just by waiting and keeping their cash in their wallets, until the parties concerned grow up and reach a headache free compromise for movies. Out of the three entertainment sectors, this is the market with undoubtedly the greatest global reach.


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