The Technophilez

Wal-Mart Stores Inc has decided to exclusively sell high-definition DVDs in the Blu-Ray format, dealing what could be a crippling blow to the rival HD DVD technology backed by Toshiba Corp

The move by the world's largest retailer, announced on Friday, caps a disappointing week for HD DVD supporters, who also saw consumer electronics chain Best Buy Co Inc. and online video rental company Netflix Inc. defect to the Blu-ray camp.

In a statement on its Web site, Wal-Mart said that over the next few months it will phase out sales of HD DVD systems and discs. By June, it will sell only products in the Blu-ray format which was developed by Sony Corp.

"We've listened to our customers, who are showing a clear preference toward Blu-ray products and movies with their purchases," said Gary Severson, a Wal-Mart senior vice president.

The move affects 4,000 Wal-Mart and Sam's Club stores in the United States, as well as related online sites. The stores will continue to sell traditional DVD players and movies.

The so-called format war between HD DVD and Blu-ray has been a thorn in the side of retailers, which have had to commit shelf space to devices from both camps even as they field complaints from frustrated and confused customers.

Next-generation DVDs and players, boasting better picture quality and more capacity, were expected to help revive the $24 billion global home DVD market. But Hollywood studios had initially split their alliances between the two camps, meaning only certain films would play on a consumer's DVD machine.

The Blu-ray camp has responded to the rather dramatic HD DVD player price cut from last week this weekend: If you purchase certain LCD TV models, Sony and Sharp are throwing in a “free” Blu-ray player.

Price has not been one of the advantages of Blu-ray players so far, but it appears that Sony & Co are beginning to take first shots at Toshiba on this battlefield as well. The ad package in your Sunday newspaper brought two especially interesting flyers – one from Sony and one from Best Buy.

Sony is offering a $400 rebate on the purchase of a LCD TV/Blu-ray player package, which essentially gets you the BDP-S300 for free (we’ll forget the sales tax here). Qualifying TVs are the 46” KDL-46V3000, the 46” KDL-46W3000 and the 52” KDL-52W3000, which carry MSRPs of $2300, $2500 and $3000, respectively. The instant rebate can be used for all of Sony’s current Blu-ray players (excluding the Playstation 3) and is apparently available through all retailers that offer these products.

BestBuy not only advertises this Sony program, but also a similar and time-limited promotion for Sharp TVs and Blu-ray players. Purchasing an Aquos D64-series LCD TV (for prices between $1700 and $3000) allows customers to bag a Sharp BD-HP20U Blu-ray player free of charge. The player usually retails for $500.

Of course, if you own an HDTV and simply want a cheap high-def player, the Toshiba HD DVD units are still the most attractive devices. But you’ll have to be careful what and where you buy: For example, Best Buy offers the entry-level HD-A3 (whose MSRP was dropped to $150 by Toshiba last week) for $300. Most online shops are currently selling this player for about $125.

The Blu-ray promotion includes five free movies; the HD-A3 HD DVD player includes seven or nine free movies, depending on the retailer.

Toshiba Corp. on Monday announced an aggressive campaign to bolster its HD DVD movie disc format against Sony-backed Blu-ray technology, cutting prices on players to as low as $149.99.

The HD DVD camp suffered a serious blow on Jan. 4, when Warner Bros. Entertainment said it would stop publishing movies on HD DVD in May, to focus on Blu-ray and regular DVD.

That leaves only two major studios, Paramount and Universal, still supporting HD DVD, while five support Blu-ray.

Toshiba on Monday slashed the suggested retail price of its cheapest player, the HD-A3, from $299.99 to $149.99. The price for the HD-A30 was also halved, from $399.99 to $199.99, while the price on the high-end HD-A35 went from $499.99 to $299.99.

HD DVD players have been cheaper than Blu-ray players for a while, and sales of standalone players have been strong. But Blu-ray has benefited from Sony's cachet among video enthusiasts, as well as the ability of the PlayStation 3 game console to play Blu-ray discs.

"While price is one of the consideration elements for the early adopter, it is a deal-breaker for the mainstream consumer," said Yoshi Uchiyama, group vice president of digital audio and video at Toshiba America Consumer Products.

Toshiba also said it planned an extended campaign of TV, print and online advertising to promote the format.

The availability of two competing formats - and the confusion and uncertainty it's sowed among buyers - has been widely blamed for the slow adoption of high-definition players in general.

Last week's CES was supposed to be an opportunity for the fledgling HD DVD to prove itself, but outside circumstances led to it being more of a death knell for the format, and now player prices are less than half of their respective pre-holiday MSRPs.

On Amazon, Toshiba's HD-A3 player is now priced at under $135, a new non-sale low.  The A3 is Toshiba's current low-end model and does not offer full 1080p high definition output (its maximum is 1080i).

Toshiba's HD-A30, its least expensive device to offer 1080p playback, now has a suggested retail price of around $200.  Before CES, it was $400, and at retailers like Amazon and Sam's Club, the price has dipped even lower, to around $180.

Just one day before much of the electronics community headed down for the Consumer Electronics Show in Las Vegas, Warner Bros announced it was ditching HD DVD in support of backing Blu-ray exclusively.  Sister companies HBO and New Line followed suit shortly thereafter.

At CES, the HD DVD booth sat meekly behind a glorious Blu-ray booth and garnered very little attention.  Nearly every company with Blu-ray ties snuck in some way to slam HD DVD, while those connected to the failing format tried to get by without commenting on the format war.  This could be the start of a slew of "fire sales", marking the beginning of the end for the unfortunate format.

The decision by Warner Bros. to drop HD DVD in favor of Blu-ray Disc for high-definition movies has set the electronics industry abuzz. Announced on the eve of the Consumer Electronics Show, the move put a single question in the minds of thousands of industry-insiders heading to the show in Las Vegas: Could the high-definition format wars be over?

Since both formats launched they have been locked in a battle that pitted some of the industry's biggest consumer electronics companies against each other. Backing Blu-ray Disc has been Sony, Panasonic and Samsung, while HD DVD's main supporters have been Toshiba, Microsoft and Intel.

The battle also divided Hollywood and left consumers with a difficult choice: their favorite movies were likely split between the two formats and there was a risk the player they bought would become irrelevant. As a result consumers kept away from the formats and sales have been sluggish.

Warner's decision will give Blu-ray Disc an advantage in terms of content. With the move, five of the big seven Hollywood studios now back Blu-ray Disc with only two, Paramount and Universal, backing HD DVD.

The Warner announcement certainly put the HD DVD Promotion Group's CES plans in disarray. Within hours of the announcement, the group cancelled its scheduled Sunday-evening news conference and subsequent media interviews at CES.