Feb 18, Channel News Asia

TOKYO: Japan's Toshiba is considering abandoning its HD-DVD format as it is losing the battle for market dominance against rival Sony's Blu-ray format, an industry source said on Monday.

Toshiba is reviewing its HD-DVD business and "a complete withdrawal is one of the options it is considering", the source said.

The move came after top US retailer Wal-Mart on Friday drove another nail into the coffin of HD-DVDs by announcing it would shift to exclusively selling movies on Blu-ray.

Weekend reports said losses for the company could reach tens of billions of yen (several hundred millions dollars) if it decides on the pullout.

The HD-DVD camp also includes Microsoft, Intel, Universal Home Studios, and Paramount Home Entertainment.

The battle between the two incompatible DVD formats for next-generation DVDs is often dubbed as a replay of the VHS-Betamax battle between two types of video cassette tapes in the late 1970s and early 1980s.

Wal-Mart's decision came in the same week that major electronics seller Best Buy and online video rental giant Netflix declared their allegiance to Blu-ray.

The death of HD DVD has been heralded since January, when Warner Brothers studio – Hollywood's largest distributor of DVDs – pulled out of an alliance with Toshiba and switched to Blu-ray.

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photo: A Toshiba booth at the CEATEC exhibition in Chiba, Tokyo (CNA)