Archive notice: This article was originally published on March 14, 2008. Links and embedded videos are preserved as part of the historical record.
Half of the amount consists of write-downs for withdrawing from the once-promising business segment. As the business newspaper The Nikkei reports, the group has thus missed its original forecast and plans to draw a final line under the project by March.
“Essentially, both HD-DVD and Blu-ray were developed to generate even more money for the industry. Of course, we too have taken note of Toshiba’s decision. Nevertheless, at this stage I refuse to produce on Blu-ray, because DVD will continue to exist for the time being. Furthermore, the licence fees currently being charged for Sony’s successor format are outrageously high,” Arno Ascher, Managing Director of Videoland-Videokassetten Handelsgesellschaft, tells the online news service pressetext.de.
The difference in quality between DVD and Blu-ray is also still barely perceptible to customers. “Consumers are more unsettled than decided because of the public euphoria surrounding Blu-ray,” Ascher continues.
Industry experts say Toshiba will close the financial year with an operating profit of around 2.5 billion dollars, falling a hefty 398 million dollars short of the targets announced for 2007.
In the preceding year, the company had reported a figure of 2.57 billion dollars to its shareholders. Experts regard the withdrawal from the HD-DVD business, announced on February 19 this year, as a logical step, since a large part of the film industry does not intend to support the format in future and instead favours Sony’s Blu-ray disc.
“We carefully evaluated the long-term effects of continuing the so-called ‘HD format war’ and concluded that a swift decision would best help the market develop,” Toshiba chief Atsutoshi Nishida said at the time, explaining the decision.
As Asian media report, the company intends to include all losses from the failed project in its accounts for the current financial year. In view of the decision in favour of Blu-ray, Toshiba intends to focus entirely on core areas such as the production of flash chips from the new fiscal year beginning on April 1.
“When Toshiba stops producing its HD-DVD devices at the end of March, this does not change the fact that many Blu-ray players or existing HD-DVD players can still play DVDs,” Ascher concludes.
