Monday, July 11, 2005

The HD-DVD, Blu-ray Battle

The movie, computer, and consumer electronics industry is about to break out in a VHS vs. Betamax war over the next generation of DVD formats. Barring last-minute concessions, things are going to get interesting.

The New York Times reports (HT TV Barn) that Hollywood is still deadlocked in a battle over the successor to the DVD format. Right now there are two primary formats, HD-DVD and Blu-ray DVD. In short, HD-DVD can be thought of as an extension to to the regular DVD format which makes it cheaper and quicker to produce than the BDVDs which use an entirely new technical model. The downside for HD-DVD is that its capacity is much smaller compared to BDVD. Just recently, Sharp announced it has developed a 100GB disc which it says will be compatible with BDVD. The max an HD-DVD can hold is 45GB. (Detailed specs for both here.)

In the article, the Times gives a listing of which studios and tech companies are on which side (HD-DVD almost has 50 percent of the movie market) but strangely leaves out the fact that Microsoft is backing HD-DVD which could be significant.

In the end, however, it may not be the movie industry that determines which format wins. The still-growing console video game industry may do that. Market leader Sony is one of the creators of the Blu-ray technology and is incorporating them into the upcoming PlayStation3, in the process driving the production cost of it to around $490 and creating a $90 loss on each unit. The system isn't skedded for release until next year.

Microsoft's next-generation Xbox 360, meanwhile, is still sticking with the existing DVD format. The advantage for MS is that this will allow it to release the 360 before Christmas this year. However, some developers don't like the size limitations of the disc format and are worried they'll have to release games on multiple DVDs, thereby annoying gamers. As a business strategy, Microsoft's failure to integrate HD-DVD into the Xbox may be what dooms the format.

As for Nintendo, the third-place (at least in the U.S. and Europe) is playing its cards close to the vest, though it's rumored that the company's upcoming system will be using disc technology from Panasonic, one of the backers of HD-DVD. Even though it may be using HD-DVD discs, Nintendo has officially stated that it "will not support high-definition." This announcement has spawned the creation of a web site devoted to convincing Nintendo to support HDTV.