Hi-def battle ends as Toshiba quits HD DVD

Wave of defections
Once the balance starts tilting in favor of one in a format battle, then the domination tends to grow and become final, said Kazuharu Miura, an analyst at Daiwa Institute of Research in Tokyo.

"The trend became decisive I think this year," he said. "When Warner made its decision, it was basically over."

With movie studios increasingly lining up behind Blu-ray, retailers also began to stock more Blu-ray products.

Friday's decision by Wal-Mart Stores Inc., the largest U.S. retailer, to sell only Blu-ray DVDs and hardware appeared to deal a final blow to the Toshiba format. Just five days earlier, Netflix Inc. said it will cease carrying rentals in HD DVD.

Several major American retailers had already made similar decisions, including Target Corp. and Blockbuster Inc.

Also adding to Blu-ray's momentum was the gradual increase in sales of Sony's PlayStation 3 home video-game console, which also works as a Blu-ray player. Sony has sold 10.5 million PS3 machines worldwide since the machine went on sale late 2006.

HD DVD supporters included Microsoft Corp., Intel Corp. and Japanese electronics maker NEC Corp.

(Msnbc.com is a joint-venture of Microsoft and NBC Universal.)

Microsoft's Xbox 360 game machine can play HD DVD movies, but the drive had to be bought separately, and Nishida said about 300,000 people have those.

Worldwide sales of personal computers with HD DVD drives total about 300,000 worldwide, including 140,000 in North America and 130,000 in Europe, he said.

Toshiba to concentrate on flash memory
Recently, the Blu-ray disc format has been gaining market share, especially in Japan. A study on fourth quarter sales last year by market researcher BCN Inc. found that by unit volume, Blu-ray made up 96 percent of Japanese sales.

Sony said it did not have numbers on how many Blu-ray players had been sold globally.

Toshiba's stock slipped 0.6 percent Tuesday to 824 yen after jumping 5.7 percent Monday amid reports that a decision was imminent. Sony shares climbed 2.2 percent to 5,010 yen after rising 1 percent Monday.

Also Tuesday, Toshiba said it plans to spend more than 15.7 billion for two plants in Japan to produce sophisticated chips called NAND flash memory, which are used in portable music players and cell phones. Production there will start in 2010.

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