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Who stands to lose most from the HD-DVD debacle?
Today Toshiba announced what everyone in the industry had predicted since Warner decided to withdraw support for their high-definition DVD format, HD-DVD is dead. The decision to discontinue this technology will cost Toshiba hundreds of millions of dollars. They are not the only losers, though. About a million customers had bet on HD-DVD and now they are stuck with obsolete players (that fortunately can still be used as upscaling DVD players) and media. However, beyond all those abandoned customers, there are some companies that stand to lose big time from Blu-ray‘s victory.
The first victim is certainly Microsoft’s XBox 360. In January, for the first time since it was launched, Sony’s Playstation 3 outsold the former console by a comfortable margin n the U.S. I expect this to happen again at least over the next few months as many gamers who are now realizing the value of the PS3 as a next generation DVD player are moving in flocks to buy the console. Just look at what regular users are posting on the Internet and you will see that the mood over the PS3 has clearly changed. Microsoft is mulling a Blu-ray external player for the XBox 360 but that could not be enough to reverse the trend, unless they reduce the cost of their Elite console significantly.
Other victims include online video providers such as Microsoft (through XBox and Media Centre PCs) and Apple. Until now, most customers compared the quality of digital downloads to DVDs, mainly because high-definition DVDs had failed to catch on due to the lack of a unique standard. That is now going to change, and even though it is now possible to purchase and rent 720p movies over the Internet, this media is no match to Blu-ray movies. That really means that wide adoption of Internet movie downloads will be delayed. Don’t get me wrong, it will happen, but physical media will still reign for a few more years until faster and cheaper Internet connections become available. This is certainly not bad news for those of us not living in the U.S. There are still many legal and distribution issues that need to be sorted out before all countries in the world can have access to Hollywood and other dream factories media from around the world through the Internet, legally. Knowing that in the meantime there will be a physical alternative is tranquilizing. I would hate to be stuck for another decade with DVDs on high-resolution screens.