Toshiba decides to give up on its HD DVD format

Tokyo: Japan's Toshiba waved the white flag in the high-definition home movie war yesterday, giving up on its HD DVD format after losing the support of key studios and retailers to the Blu-ray technology backed by Sony.

The decision by the electronics maker ends its battle with a consortium led by Sony over who should set the standard for the next generation of discs, a fight that confused shoppers and stalled a move to the new technology in the $24 billion home DVD market.

The Blu-ray win means consumers 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.

Toshiba, which had hoped HD DVD would drive growth in its consumer electronics business, said it would aim to end its HD DVD business by the end of next month.

"This was a very difficult decision to make ... but when we thought about the trouble we would cause to consumers and our partners, we decided it was not right for us to keep going with such a small presence," Toshiba chief executive Atsutoshi Nishida told a news conference.

The company said it would continue to service existing HD DVD products, and added it expected bigger profits over the next year as it will cut spending earmarked to promote HD DVD.

The tide turned against HD DVD after the defection to Blu-ray by Time Warner's Warner Bros studio last month.

Big US retailers soon followed, including Wal-Mart Stores, Best Buy and online video rental company Netflix, and pundits began writing obituaries for HD DVD.

While Toshiba has lost the chance to be the leader in the next generation of movie discs, investors welcomed its decision to cut its losses on HD DVD early and invest in more promising businesses.

Toshiba's shares leapt nearly six per cent on Monday, although they pulled back 0.6 per cent yesterday compared with a 0.9 per cent rise in the benchmark Nikkei average.