Consumers, analysts, retailers give HD DVD the cold shoulder

[BBlue]

Consumers, analysts, retailers give HD DVD the cold shoulder

By Eric Bangeman | Published: January 29, 2008 - 02:56AM CT

January has been a tough month for supporters of HD DVD (and for those of us early adopters who have purchased HD DVD hardware). Although the format war has resulted in faster-than-expected consumer uptake of HD hardware, an increasing number of analysts, retailers, and consumers appear to be convinced that the writing is on the wall for HD DVD.

First, the analysts. A Gartner analyst wrote in the company's weekly Semiconductor DQ Monday Report that the recent price cuts announced by Toshiba will only prolong the inevitable demise of HD DVD as the HD format of choice. "Gartner believes that Toshiba's price-cutting may prolong HD DVD's life a little, but the limited line-up of film titles will inflict fatal damage on the format," according to a copy of the report seen by the IDG News Service. "Gartner expects that, by the end of 2008, Blu-ray will be the winning format in the consumer market, and the war will be over."

On the retail front, some retailers are rethinking their commitment to HD DVD. Woolworths, which is still going strong in the UK after all but disappearing from the US, has decided to go Blu-ray only. According to a story in the Retail Bulletin dug up by GamesIndustry.biz, Woolworths will stop stocking HD DVD titles by March, devoting its HD shelf space exclusively to Blu-ray.

Woolworths is giving much of the credit for Blu-ray's strong showing to the PlayStation 3. "The main reason is the success of Sony's PlayStation 3 machine," Woolworths DVD buyer Steven McGunigel told Retail Bulletin. "Because it plays Blu-ray discs, there are over three-quarters of million homes in the UK that can view the new high definition format."

Indeed, Sony's decision to make the PS3 a beachhead for Blu-ray has proven to be a shrewd one. The PS3 is currently the only Blu-ray player on the market capable of supporting the full Blu-ray 2.0 profile, which calls for at least 1GB of local storage for updates and content as well as an Internet connection. As a result, it's easily the most future-proof player on the market right now.

Recent developments appear to have left consumers a bit more leery of HD DVD. Those looking to unload their Xbox 360 HD DVD add-on drives via eBay are having to swallow hard as the units consistently sell for under $100. It's a similar story on Craigslist, where the players appear to be going for around $100. One poster on the classified ad site says that he's selling his two-month-old player "because BLU RAY has won the format war."

The format war may not quite yet be over, but could be soon. Warner Bros.' high-profile defection right before the start of CES was a severe blow to the backers of HD DVD, leaving the HD DVD consortium dazed and confused. Only Paramount and Universal are releasing titles in HD DVD, with Paramount dropping Blu-ray last August for a reported $150 million in financial incentives. Both studios deny that a move to Blu-ray is forthcoming, but if HD DVD sales continue to plummet, they may feel that they have little choice.

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