Sony vs. Toshiba in the Battle for HD DVD Supremacy

Like competing samurai clans, Sony and Toshiba’s corporate rivalry is the stuff of legend in Japan. Their most recent public conflict came to its conclusion today following Wal Mart’s announcement to abandon Toshiba’s HD DVD format in favor of Sony’s Blu-Ray disk technology.

Both technologies offer a significant advantage in their ability to store up to six times more data than traditional DVDs, enabling more content and higher resolution for today’s HD television monitors. Analysts think Sony’s retail success with PS3, based on Blu-Ray technology, was the factor that ultimately favored Sony over Toshiba.

Wal Mart’s announcement was not the first strike against Toshiba, but it was certainly the decisive one. Last May, Time Warner announced it would no longer support titles on both high-definition video formats, choosing Sony Blu-Ray as its format of choice. This was the tipping point. Like the VHS vs. Beta wars of a generation ago (which, ironically, Sony’s BetaMax format famously lost), it was clear that the world needed only one standard. Supporting two standards may in theory create competition but is ultimately inefficient. Retailers have neither the desire nor the shelf space to carry two technologies that do the same thing, be they DVDs or the hardware that reads them. When Netflix and Best Buy announced their support of BluRay earlier this month, it was clear the battle was waning; Wal Mart’s announcement made Sony’s victory complete.

The announcement leaves not one, but two losers. The first is Toshiba, having spent millions developing this technology, leaving them no choice but to move on to the next battle. The other losers are Early Adopters, who pay a premium for buying first-generation technology, and sometimes pay the price for supporting the wrong brand.

For Early Adopters, however, there is a silver lining. Since Wal Mart’s announcement, the price of HD DVD disks has suddenly dropped by half. Buy now – supplies are limited.