Toshiba reportedly set to lose nearly $1 billion in wake of HD-DVD format death

by Griffin McElroy { Mar 16th 2008 at 9:00PM }

In order to truly enter a format war, one must possess a number of things. The first, of course, is a viable format, unique from all others currently on the market. The second is the persistence to constantly push your format on as many film companies and consumer electronics producers as you possibly can, to ensure your victory. Finally, should said victory never come, you must possess a strong stomach and a wide wallet -- as losing a format war is a costly and heartbreaking endeavor.

According to the Nikkea Business Daily, Toshiba is learning this lesson to the tune of a ¥100 billion loss in revenue this year (to grasp the magnitude of this loss, here it is in numeric form: ¥100,000,000,000) or roughly $986 million in U.S. cash. We usually leave the economic speculation to the experts, but we're pretty sure that's a large sum of money that Toshiba would rather not part with. But as they say, in order to make an omelet, you've got to break a few eggs; though sometimes, you have to break 100 billion eggs, only to find that nobody wants to eat your omelet. Okay, nobody says that.

Tags: 100billion, blu-ray, dvd, format, formatwar, hd-dvd, hddvd, ps3, toshiba

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Reader Comments (Page 1 of 2)

peacebyanymeans (AKA: Moorio) @ Mar 16th 2008 9:06PM

I lol'd.

I'm not sure why, but I did.

Jtenma @ Mar 16th 2008 9:42PM

I did too OMG LOL I laughed and then asked myself" why?"

Jerk Face @ Mar 16th 2008 10:38PM

Because Griffin is an awesome writer, that's why!

Good work, pal!

nick @ Mar 16th 2008 11:13PM

I dunno...

I caught this story about a week ago, so it's a bit of a deja vu. But at the other location they put it more into perspective. Last year Toshiba made almost 64 billion. This year, they'll make 1 billion less.

They have their hands in litterally everything electronic. So while it's a disappointment that HD DVD did not pan out, they'll make their money elsewhere. As far a disc based players-- last I heard, they were going to start concentrating on making better upscaling DVD players.

Deck @ Mar 16th 2008 9:10PM

"But as they say, in order to make an omelet, you've got to break a few eggs; though sometimes, you have to break 100 billion eggs, only to find that nobody wants to eat your omelet. Okay, nobody says that."

Love it Griffin! I lawlz.

embassy @ Mar 16th 2008 9:19PM

they knew the costs when they came to the dance.

Unfortunately they didnt have a gaming division to push thier baby like Sony.

and MS had its own agenda from day one.

nutman @ Mar 16th 2008 9:40PM

The gaming division had nothing to do with it. Sony owns one major studio and has partial control of another. Blu ray also had the much needed manufacturer support. HD DVD only had Toshiba and Venturer, and afaik venturer just took the HDA2 and made it crappier. They also barely count because they were screwed by toshiba. right when the player launched Toshiba cut prices.

embassy @ Mar 16th 2008 10:15PM

yes but its also a fact that the ps3's inclusion of blu-ray significantly helped BR market saturation. If I'm not mistaken, PS3 is still the # 1 selling BR player. If toshiba had a comparable multimedia device this "War" would potentially still be raging on.

Initial Movie Studio Support is pretty arbitrary cuz the studios will flock to wherever the highest volume of HD players are. and thanks to the ps3 the BR market had a vehicle to move substantially more volume than toshiba with HD-DVD.

MS just didnt want the 360 price to exceed $399 and they wanted ( and had to imo) beat sony to market. With Hd-DVD built in, they would've had to launch at a price similar to the ps3's initial price and probably wouldve had to launch a yr later as well, Which wouldve been suicide imo. And im sure toshiba didnt wanna budge on Hd-DVD prices to keep the 360 cost down.

nutman @ Mar 16th 2008 9:40PM

They took a risk. Thats business for ya. They'll make it up with DVD royalties and of course their ever flourishing semi conductor business.

D_Average @ Mar 16th 2008 9:20PM

In the words of Nelson...."HaHa!"

Henry @ Mar 16th 2008 9:25PM

I hope they have a large overdraft.

rom @ Mar 16th 2008 9:26PM

It wouldn't have been as much if they just would've admitted defeat when Blu-ray took the lions share of all available studio support OR when Sony started shipping out PS3s.

It was a huge gamble on their part. I wouldn't have taken it as far as they did.

mr nimblewick @ Mar 16th 2008 9:26PM

Damn, I wish it had been sony.

Nick the Hero of Canton @ Mar 16th 2008 9:28PM

HD DVD really was a good format, it's just that blu ray was superior.

Nick the Hero of Canton @ Mar 16th 2008 9:29PM

Edit:

No matter how you look at it, Blu Ray didn't win because Microsoft was attatched to HD. Sony didn't make Blu-Ray win alone, and Microsoft did not make HD lose alone, so really, It irks me when I see fanboys arguing about blu-ray VS HD-DVD and Sony fans bashing Xbox fans for the win of Blu-Ray, when it wasn't really just because of Sony.

Blu-Ray was a superior format with more studio support. That's how your going to win.

capt_carl @ Mar 16th 2008 9:49PM

For the first time that I can recall, the superior format has won.

embassy @ Mar 16th 2008 10:39PM

yes but how do you get studio support?

by having players in people's homes.

the ps3 was/is the main BR player on the market and put BR players in peoples homes.Studios dont care which one is marginally better than the other, they're going to support the format that more people watch and have access to, simple and plain. Toshiba had no such device to rely on to put HD-DVD players in homes at such a high frequency as the ps3.

Abuzar @ Mar 16th 2008 11:02PM

It had more storage, but I wouldn't call it superior. They both had their pros and cons.

Hala Madrid!!! SSBB Code:3866-7729-0830 @ Mar 17th 2008 12:03AM

@embassy
We get it you are a PS fanboy please stop explaining how Blu-Ray won

Now back to the story
I agree nick Blu-Ray is a superior format the HD is great but what I still don't get is what this has to do with games or gaming anyway? And why PS fanboys are still talking about this?

Burnt Meatloaf @ Mar 17th 2008 1:30AM

The only way to determine which format is "superior" is to base your judgment on how well each format meets the needs of the customers.

I think I speak for a lot of people when I say that MOST people did not see a clear advantage of one format over the other. Most people didn't even care about the Blu-ray vs HD-DVD war.

No, in the end it depended on how much money was being thrown around to buy the loyalty of movie houses, and the format with the most publishers won. Given this, it's pretty clear that the superiority war between VHS and Beta was more clear-cut than the war between Blu-ray and HD-DVD. It had nothing to do with technology -- it was all about backdoor politics.

I liked HD-DVD because it had a more complete feature set at launch and required less and cheaper hardware. Given equal image quality, that better suits the needs of the customers. Most people couldn't tell a difference, and hardly anyone really understands how the technology works, either.

In any case, I decided to wait to see who won, which was really the only winning strategy for consumers. My dad didn't wait, and he just bought himself a "backup" HD-DVD player before he gets one of the next-gen Blu-ray players.

embassy @ Mar 17th 2008 4:20AM

mr Hala Madrid,

I used common sense and some logic in my post, a "fanboy" uses neither of those.

I also find it funny when you say "stop saying how BR won" when that is the basis of this very article.

basically what you said was "stop staying on topic"

see how retarded you sound?

who's the fanboy again?

try again.

Hala Madrid!!! SSBB Code:3866-7729-0830 @ Mar 17th 2008 1:22PM

@embassy
no thats not the topic read the headline nextime
is about toshiba losing money it doesn't say how blu-ray won

Nick the Hero of Canton @ Mar 17th 2008 7:29PM

HD had a huge player push when they went on sale, the issue was no one buying the discs, not the players. That's how blu-ray won it's final blow in studio support.

Also, why the Hell was my comment rated down, and then a post 2 below it which said the same thing (the better format won) gets rated up?

Vegnagun bwf @ Mar 16th 2008 9:40PM

I can't help but think this is Toshiba's fault. What sounds more appealing: A Bluray or an HDDVD. Seriously.

Jtenma @ Mar 16th 2008 9:51PM

I would've thought that HDDVD would have been more accepted since it's a "step up" from DVD(in terms of naming). BLURAY just came outta nowhere, and I thought that the casual buyer would go- DVD: HD-DVD not DVD:BLURAY? IMO. I also think that's what kept the PS3 afloat till it got steam. PS1:PS2 AS PS2:PS3. It's the next step upward I guess, "so it must be better". ( casual buyer) Also, I always thought RED WAS COOLER THAN BLUE AS WELL!111!!1!!1(WAY OFF TOPIC)

Vegnagun bwf @ Mar 17th 2008 12:28AM

You make a good point, almost. Think about your average American consumer. He/She likes fast cars, movies that feature exponentially more guns and boobs than substance, and likes their food fast and greasy.

C'mon now. Bluray > HDDVD. They don't know what a "Bluray" is, but it sounds like something out of James Bond, and they want it.

NATO_Duke @ Mar 17th 2008 9:55AM

The average consumer also likes something comfortable to him, which makes sense to him when he sees it on the shelf. I would think they would go for HD-DVD as it would seem like a comfortable evolution. (If we are talking about names alone)

In the end I don't think this was a war decided by the consumer. It was studio support that drew the line.

Dio @ Mar 18th 2008 4:43AM

Sometimes I read your "bluray" as BLURRAY XD (blurry for those who don't get it)

deaftly (Brawl - 1075-0467-4222) @ Mar 16th 2008 9:49PM

hey, shit happens.

ill trooper @ Mar 16th 2008 10:14PM

Expensive shit happens

Wilhelm @ Mar 16th 2008 11:08PM

Where shit happens.

jaybcorreia @ Mar 16th 2008 10:04PM

The PS3 had a huge factor in it in terms of studio support they kno ppl will buy the PS3s just like the pS2 with the dvd player it just makes cents get it lol i kno it was lame i'm ashamed :-(

Kspraydad @ Mar 16th 2008 10:09PM

And SONY sold 10 million consoles at approx $200 dollar loss each for a total of a 1 billion loss too.

Suck it up Toshiba. Shit happens.

SharpShooter @ Mar 16th 2008 10:55PM

Um, you realize that was when the PS3 launched? Sony isn't losing anything on the PS3(or since I last heard).

Evan @ Mar 17th 2008 8:15AM

And Microsoft lost 4 billion on the first Xbox. That console is finished. There's no way Microsoft will ever recover that money, the Xbox might as well have never existed. At least Sony has a couple years to go so they might recover their losses on the PS3.