Blu-ray winning format war, Gartner says

Posted by Wolfgang Gruener

Chicago (IL) – Gartner analyst Hiroyuki Shimizu believes that the recent price cuts of the HD DVD camp are a desperate move to compete against Blu-ray and will end up to be “useless resistance”. By the end of 2008, Shimizu wrote in a research note today, Blu-ray will have won the format war.

It hasn’t been a particularly good start into the new year for the HD DVD camp. First, Warner dropped (and then extended) its support for the format (only Paramount and Universal are still committed to supporting HD DVD), then Blu-ray began promoting free Blu-ray players which apparently caused HD DVD player sales to decline and now there is the first large analyst firm that actually predicts the format to die within this year.

In a research note that was leaked to media today, Shimizu was quoted stating that the recent HD DVD price cuts “may prolong HD DVD's life a little”, but limited content availability will cause HD DVD to disappear. And it may be a quick death, according to Gartner: By 2008, the format war may be over, Shimizu wrote.

The note comes on the heels of reports that Blu-ray has an overwhelming lead in Blu-ray player sales over its rival. However, analysts such as Stephen Baker from NPD are still cautious when interpreting the long-term meaning of early 2008 sales data. One week doesn't really mean a lot," Baker told TG Daily in a phone interview last week. "With promotions, it's very easy to manipulate a week's worth of sales," he added.  "We cannot make judgments based on one week's worth of data."

Baker in fact noted that low-end HD DVD players may be heading into a critical area that may enable them not only to compete with Blu-ray, but up-conversion DVD players. Toshiba’s HD-A3 player is selling for as low as $115 through some websites these days and is coming close to the price of, which are spanning a wide price range from about $50 to more than $150. Baker believes that prices of the HD DVD player may be low enough to attract buyers who are looking for a DVD player: "It's certainly a viable option because it's a relatively inexpensive player in general," the analyst told us.  "Something that has features that people want and is relatively inexpensive is a sure way to open the market to consumers."

The question then, of course, remains, whether the HD-A3 offers those features that consumers want. And this clearly appears to be question that relates to available content. If that is the case, then five out of seven Hollywood studios backing Blu-ray and only two backing HD DVD suggest that the format war already has become an all-or-nothing game for the HD DVD camp.