Blu-ray vs. HD DVD

As everyone is well aware, Blu-Ray won the High Definition war. Toshiba announced that they would no longer be producing HD DVD players. Don Reisinger wrote an interesting article for CNet suggesting that Sony and Toshiba conspired to kill HD DVD. As evidence, he points to the fact that less than 24 hours after Toshiba announced they were killing HD DVD, Sony sold them a Chip Factory for $835 Million dollars (practically a steal.) I agree that this is suggestive of some sort of plan to bring about the final end of HD DVD, but I’d like to take the thinking a little farther.

In a format war, there is only one true loser, and that’s the consumer. While the format war goes on, prices remain high, and early adopters are taking a chance that the technology they buy will no longer be supported. (Just ask Betamax owners about format wars.) But who benefits from a format war? The proponents of the alternate formats do, at least at first. They get to sell expensive equipment to early adopters who are more than willing to shell out the money for the next hot technology. The longer a format war goes on, the longer time both companies have to recoup their R&D costs. Sure, they have expenses as well. In this case, the expense of luring studios to adopt their specific format, but it’s offset by the amount of money they can make from early adopters.

So if the clear winners here are Toshiba and Sony, what better way to ensure a successful format war than to create one and orchestrate every step in the game. Sure, it sounds like a conspiracy theory, and it is, but clearly Sony and Toshiba both benefited from the format war. So what if the Chip Factory was not Toshiba’s reward for dumping HD DVD, but a reward for getting into the format war in the first place?

All at a cost to the consumer.