Blu-Ray and HD-DVD: The End Game

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Case Details:

Case Code : BSTR287
Case Length : 14 Pages
Period : 2006-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : Large
Industry : Consumer Electronics
Countries : USA, Europe and Japan

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded that a swift decision will best help the market develop."1

- Atsutoshi Nishida, President and CEO of Toshiba Corporation, in February 2008

"It took DVD ten years to get where it is. Blu-ray is two years or three years into its launch, depending on when you consider the start to be. There is a long way to go for Blu-ray."2

- Stan Glasgow, CEO, Sony Electronics

"The horse that we're fundamentally backing is the one that says the future of entertainment content is online digital distribution. I would argue that we backed the right horse."3

- Neil Thompson, Senior Regional Director, Northern Europe, Entertainment and Devices Division, Microsoft, in April 2008

Toshiba Gives Up!

On February 19, 2008, Toshiba Inc. (Toshiba) (Refer Exhibit I for information on Toshiba's product profile) announced that it would begin to reduce shipments of HD DVD players and recorders to retail channels, and would wind up the business by the end of March 2008. It also planned to end volume production of HD DVD disk drives for PCs within the same time frame.

As far as notebook PCs with integrated HD DVD drives were concerned, the company said that it had not taken a decision yet on whether to replace these models or not. It said that it would, however, continue to provide support and after-sales service to all HD DVD products.

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1] "Toshiba Announces Discontinuation of HD DVD Businesses; Company Remains Focused on Championing Consumer Access to High Definition Content,", February 19, 2008.
2] "Blu-ray Player Sales Up Seven-fold,", February 21, 2008.
3] "Xbox 360 Chief Rings the Changes after Failures,", April 03, 2008.

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