Blu-Ray Emerging as Winner in DVD War

TOKYO -- An impending end to a format war over next-generation DVDs boosted shares in both victorious Sony, in the Blu-ray corner, and Toshiba, in the losing HD DVD camp, on Monday as consumers cheered an end to confusion over which discs will carry high-definition movies.

Shares in Toshiba, which a company source said was planning to ax its HD DVD format, jumped nearly 6 percent as analysts praised a move to cut its losses, while Sony shares rose 1 percent.

The Blu-ray win means consumers seeking sharper movies on high-definition DVDs no longer have to choose between rival incompatible formats and run the risk of being stuck with a 21st-century equivalent of Betamax -- Sony's videotape technology that lost out to VHS in the 1980s.

Having one format should also help accelerate the shift to the new technology in the $24 billion home DVD market.

"It doesn't make sense for Toshiba to continue putting effort into this," said Koichi Ogawa, a chief portfolio manager at Daiwa SB Investments. "It needs to cut its losses and focus its resources on promising businesses."

Both DVDs can carry high-definition movies, but growing support from Hollywood and big U.S. retailers such as Wal-Mart Stores have given Blu-ray a crushing lead in the war.

Overall sales have so far been small as shoppers, faced with rival machines that played only one type of disc or the other, have held back.

"I was expecting Blu-ray to win, but I was kind of waiting it out," said Masahiro Taniwaki, a 26-year-old systems engineer shopping for a Blu-ray recorder at electronics retailer Bic Camera in Tokyo.

Toshiba said Monday that no decisions had been made on HD DVD, but widespread media reports said the company that has led the HD DVD fight was about to surrender.

"The two formats, though both were good, have confused consumers and prevented them from moving into the high-def future," said Stephanie Prange, editor of Home Media Magazine.

The defection from HD DVD in January of Warner Brothers and its huge film library brought the tally of Hollywood movies in the Blu-ray camp to a commanding 70 percent.

Recent sales figures show many consumers had already written off HD DVD, which was also backed by Microsoft.

Blu-ray accounted for 93 percent of next-generation DVD hardware sales in North America in the week after Warner's announcement in January, data from the NPD Group showed.

Blu-ray recorders from Sony, Matsushita and Sharp made up about 96 percent of the Japanese market in the last quarter of last year, said BCN, another research house. At the core of both formats are blue lasers, which have a shorter wavelength than red lasers used in current DVD equipment, enabling discs to hold up to five times as much data.