Toshiba got its hindquarters handed to it in the HD DVD / Blu-ray format war, and that had to sting. But while all of the other HD DVD backers have sucked it up and moved on to embrace Blu-ray (even Microsoft has announced they’re adding native Blu-ray support to Windows, I hear hell had a run on ice skates), Toshiba just seems to have dug in their heels and is acting like Blu-ray doesn’t exist. If HD DVD couldn’t win, fine, then they’ll just put out high end DVD players. I didn’t know multinational corporations could be so Emo.

So today Toshiba dropped a press release entitled Toshiba ‘Breathes New Life’ Into DVD with XDE™ Technology. XDE stands for eXtended Detail Enhancement, which to me sounds like nothing more than upscaling with fancy edge enhancement and color contrast adjustment. Frankly it sounds like crap to me, based on the press release.

XDE Flexibility

In addition to upconversion from 480i/p to 1080p, XDE technology offers consumers the ability to customize their viewing experience to their liking with its picture mode settings. With these three selectable settings — Sharp, Color and Contrast — users can get the most out of their DVD movie-viewing experience on their terms.

– Sharp Mode offers improved detail enhancement that is one step closer to high definition. Edges are sharper and details in movies are more visible. Unlike traditional sharpness control, XDE technology analyzes the entire picture and adds edge enhancement precisely where it’s needed.

– Color Mode makes the colors of nature stand out with improved richness. Blues and greens are more vivid and lifelike. Color Mode combines the improvement in color with the detail enhancement of Sharp Mode and is ideal for outdoor scenes.

– Contrast Mode is designed to make darker scenes or foregrounds more clearly visible without the typical “washing out” that can occur with traditional contrast adjustment. Recommended for dark scenes where detail may be difficult to notice, Contrast Mode is also combined with Sharp Mode to provide a clearer viewing experience.

So ‘Sharp Mode’ cranks up the edge enhancement. But too much edge enhancement is one of the most common complaints videophiles have about many titles. This is the kind of cheap trick studios use to try to make an image ‘pop’, but it is unnatural. And now your DVD player can do it to all of your discs. Yay?

‘Color Mode’ sounds like it just tweaks the color palette to favor blues and greens, which can certainly make an image seem more vivid, but artificially so. This is the same kind of trick box stores use to make images on HDTVs look more striking on the wall of screens. And also why the first thing you should do is calibrate your TV, because the settings it comes with are great for selling the set in the store, but not for accurate color reproduction at home.

And ‘Contrast Mode’ cranks up the contrast. But if the contrast isn’t there in the source material, then it must be artificially boosting and/or suppressing some of the picture to increase the contrast. It all sounds like a high-tech, fancy way of doing what people used to do with the color, tint, and contrast knobs on old TVs - and the menus that replaced them on new TVs. This doesn’t sound so much like ‘breathing new life’ into DVD as it does ‘putting DVD in an iron lung’.

You know what these remind me of? Those silly audio modes most receivers have. You know, like ‘Concert Hall’? The settings that mess with the sound to supposedly recreate the feeling of a different space, but in reality are about as close the the real thing as Froot Loops cereal is to real fruit. The snozberries taste just like snozberries!

Sure, I’m just basing this off their press release and I haven’t seen it for myself. But even if they’ve been remarkably clever about the technology, it doesn’t change the fact that they’re just upscaling DVDs and tweaking the picture to try to make it look better. They’re just putting lipstick on a pig compared to real HD media like Blu-ray. No matter how you slice it, the best DVD can provide is one-sixth the raw pixel count as Blu-ray. And no matter how clever your algorithms are to interpolate the data, you just can’t recreate what isn’t there to start with. You can never start with a 480p source and upscale it to 1080p and match a native 1080p source.

So who is going to buy XDE players? People with extensive existing libraries of DVD you say? I have many hundreds of DVDs myself. But Toshiba is selling their XD-E500 1080p/24fps Upconverting DVD player, their first XDE-equipped player, for $149.99. Now, it also handles MP3 and WMA music playback, JPEG display, and is DivX certified, which is all well and good. But you can get a non-XDE player with all of those features (1080p24 upscaling, MP3/WMA, JPEG, DivX), for $50-$60. I myself have a Philips unit I picked up a while back from Amazon for around $60 which has those features, plus known codes to enable region free playback, and it handles NTSC< ->PAL. The Toshiba is unlikely to have either of those features. So is XDE worth the extra $90-$100? Or even $50 if the player is that much cheaper online? Will XDE and the Toshiba logo on the box convince people to pay double what they can get another unit for?

I doubt it will for the majority of users. Any improvement can only be just so good, and you’d need a good HDTV to really get the full benefit. And that’s after you manage to educate users on just what XDE is. When someone in standing in their local Best Buy, comparing units on a shelf, and the only differences are the brand, the price, and that the Toshiba has ‘XDE’, you’ve got an uphill battle on your hands to educate the user on what XDE is and why they want it.

So you’re really after users who are willing to spend more for a (supposedly) better quality picture. But then the users most likely to be willing to shell out more for such improvements are the very same group most likely to be willing to shell out for a Blu-ray deck. Entry level, current model decks are under $300 now, closer to $250 in some cases. And existing stocks of last generation units can be had for less than that. Even some of the best of the current models, with bells and whistles like BD-Live, are between $350-$400. And those prices are falling as supply and competition both increase, and component costs decrease. Entry level units should be under $200 by the holidays, with some well-equipped units under $300.

So where does XDE fit? Users who are just slightly more demanding than a non-XDE DVD player, but not demanding enough to go for even a low-end Blu-ray deck? All Blu-ray decks are also DVD players, all upscaling as far as I’m aware, most quite good at it, some very, very good. Once a person is willing to spend more money on the player, beyond the glut of sub-$100 upscaling players, they’ve already taken the first step toward being willing to make the jump to Blu-ray. It seems like XDE is there just to try to catch those who don’t quite jump high enough to clear the bar. I can’t believe that’s a big market.

The DVD player market is a commodity market now, even for nice upscaling players. It is getting such that there are fairly decent DVD players that cost less than some new release DVDs. Buy a movie, get a free player. That’s a joke, but sometimes it seems like that’s the next step. Toshiba is trying to be the odd man out, and they seem to think XDE will distinguish them from the hordes of commodity players. Enough that users will pay their higher prices. I don’t think it is going to be a big win for them.

Toshiba’s HD DVD decks were very nice units with some great features. They could easily have used the same platform as the basis for a Blu-ray player development. And now is the time (well, six months ago was the time) to get some nice BD players out and make revenue on them. In 2009 when the wave of Chinese BD players hits, there will be a lot of downward pressure on player pricing, making the market less attractive to ‘premium’ brands like Toshiba. That happened in the DVD market years ago. Instead of chasing yesterday’s market long after it has been commoditized, Toshiba needs to go after the marker’s of today and tomorrow, where the margins are higher and competition is lower. I really think it is just their corporate pride and stubbornness which keeps them from embracing Blu-ray.

The full press release:
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While Toshiba officially called HD DVD dead back in February, the technology has lingered on in China. Before the end of the format war, Toshiba had begun working on ‘CH-DVD’, a special version of HD DVD for the domestic Chinese market. And this effort didn’t die with HD DVD, instead it has been renamed CBHD - China Blue High-definition Disc. Now the first CBHD devices are coming to market with Shanghai United Optical Disc establishing the first CBHD disc pressing production line, and multiple players slated for retail, according to DIGITIMES. However, the format currently lacks any major studio support. It seems that, at best, it may receive domestic support.

Of course, the BDA hasn’t just been standing by while this happens, shortly after CH-DVD was announced the BDA announced that they too were considering the Chinese codecs. And taking it a step further, unlike CBHD, which is a ghetto standard restricted only to China, the BDA is considering adding the codecs to the global Blu-ray specification.

And, despite predictions from HD DVD fans that it would ‘never happen’, the BDA has approved several Chinese CE vendors to produce Blu-ray players. And even more players have been announced recently at SinoCES. With most of their major CE vendors cranking out Blu-ray players for the growing global market player availability will rise, while unit costs fall. With a limited domestic market, CBHD will have a hard time competing with the falling BD player costs.

DIGITIMES cites lower costs as the main advantage for CBHD over BD. An existing DVD line can be converted to press CBHD for around USD$800,000, while establishing a new BD line costs around USD$3,000,000. And the licenses required to produce a CBHD player are around USD$8.10, reportedly much less than the equivalent BD licenses. However, a BD production line can take orders for export discs as well, making it easier to keep the line busy - and making money. A CBHD line is only good for domestic disc pressing. And the licensing costs for BD are expected to drop sharply in the coming years. Plus a production line can be shared between domestic and export players, spreading the non-licensing overhead costs over a larger production base.

If the BDA can complete the China-ized version of the BD specification to receive Chinese governmental approval for the format, it should easily squeeze CBHD out of the market just as it did to HD DVD.

Picked up via EngadgetHD.

The Blu-ray vs. HD DVD format war is over, but the fallout and consequences aren’t. And the big loser in the war, Toshiba, is facing the music for their failed campaign. Toshiba started the war in an attempt to increase their consumer electronics market share, but their attempted grab for lebensraum backfired and they’ve been left holding the bill. How large of a bill? According to Japan’s Nikkei business daily Toshiba will have to book a loss of $986 million relating to HD DVD, bringing their full-year profit down to roughly $2.44 billion. That’s certainly not a crippling blow for a company the size of Toshiba, but it certainly isn’t exactly pleasant. And it just goes to show the size of the risk, and the stakes, that where at the core of the format war in the first place.

Via CNET News.com.

The Wall Street Journal talked to Toshiba’s CEO, Atsutoshi Nishida, focusing mainly on the HD DVD decision. While I still blame Toshiba for starting the format war in the first place (I really should get around to writing up my synopsis of the war), I have to give Nishida credit for making the decision to end the war. I have to say he comes across fairly well in the interview, though the gloves definitely stayed on - the questions were easy lobs, not exactly hard hitting.

WSJ: When did you first start thinking about withdrawing from the HD DVD business?

Mr. Nishida: When Warner [Time Warner Inc.'s Warner Bros.] announced its support for Blu-ray on the 4th of January. We took a little time before reaching a final decision, so we could give people a chance to voice their opinions and we could consider all the ramifications and consequences of pulling out, such as how it would affect consumers and us.

WSJ: Most industry observers had expected the format war to continue for a while longer. Why did you decide to pull out so quickly?

Mr. Nishida: I didn’t think we stood a chance after Warner left us because it meant HD DVD would have just 20% to 30% of software market share. One has to take calculated risks in business, but it’s also important to switch gears immediately if you think your decision was wrong. We were doing this to win, and if we weren’t going to win then we had to pull out, especially since consumers were already asking for a single standard.

Sounds like he approached it logically and rationally, and didn’t allow corporate pride to keep Toshiba in the fight. He recognized that the war was lost, and if Toshiba couldn’t get a win then it was time to concede and cut their losses. He deserves credit for making the decision to end things quickly. And yes, January 4th (Warner’s announcement) to February 19th (Toshiba’s announcement) is very quick for a major corporate direction change. Toshiba had to coordinate with all of their partners as well.

Nishida reiterates that Toshiba plans to focus on DVD, at least for the time being. It sounds like they’ll be sitting out the Blu-ray market, though personally I can’t see them abstaining forever. They may wait until the market grows a bit to try to carve out a bit for themselves. For now they plan to focus on upconverting DVD players and PCs. They’ll also be putting more resources behind video downloads now that HD DVD is dead.

Now that Toshiba has pulled the plug on HD DVD and all, the only studio to have been 100% HD DVD throughout the format war, Universal, made the obvious announcement - they’re going to start releasing films on Blu-ray. Home Media Magazine had this:

“While Universal values the close partnership we have shared with Toshiba, it is time to turn our focus to releasing new and catalog titles on Blu-ray,” said Craig Kornblau, president of Universal Studios Home Entertainment.

“The path for widespread adoption of the next-generation platform has finally become clear. Universal will continue its aggressive efforts to broaden awareness for high-def’s unparalleled offerings in interactivity and connectivity, at an increasingly affordable price. The emergence of a single, high-definition format is cause for consumers, as well as the entire entertainment industry, to celebrate.”

I’m actually a bit surprised. Not that Universal is supporting Blu-ray, that was obviously coming, but that they made the announcement before Paramount - who still hasn’t done so, from what I can tell. Since Paramount, and DreamWorks Animation, were formerly format neutral, releasing both Blu-ray and HD DVD, I kind of expected them to be the first to jump on the news. Paramount probably still has warehouses full of Blades of Glory Blu-ray discs, and other titles they’d already pressed for release on BD before their sudden shift to HD DVD exclusivity. They could start by give those discs a new street date. I’m sure they’ll announce their plans soon.

Via Blu-ray.com.

That’s all folks! The fat lady has sung. The curtain has come down. The format war is over! Yes, really for real this time - it is official. Toshiba has called it quits:

Toshiba Corporation today announced that it has undertaken a thorough review of its overall strategy for HD DVD and has decided it will no longer develop, manufacture and market HD DVD players and recorders. This decision has been made following recent major changes in the market. Toshiba will continue, however, to provide full product support and after-sales service for all owners of Toshiba HD DVD products.

Toshiba will cease all production of HD DVD by the end of March:

Toshiba will begin to reduce shipments of HD DVD players and recorders to retail channels, aiming for cessation of these businesses by the end of March 2008. Toshiba also plans to end volume production of HD DVD disk drives for such applications as PCs and games in the same timeframe, yet will continue to make efforts to meet customer requirements. The company will continue to assess the position of notebook PCs with integrated HD DVD drives within the overall PC business relative to future market demand.

I’m thrilled to see the end of this war, doubly so to see Blu-ray finally carry the day. I’ve been calling the war for Blu-ray since before either product shipped, and I was sorry to see a war develop in the first place. Now that the war is over and we’ll have one format going forward I look forward to more Blu-ray title releases and player advancements. There are definitely a few Universal & Paramount titles I look forward to picking up on Blu-ray.

I’m also hopeful that Toshiba will join the BDA and devote their product development expertise toward producing top-notch Blu-ray players. Toshiba’s HD DVD players were decent hardware, and it gives hope that they’ll be able to produce some nice BD decks. I do think they’ll join the BDA, since the alternative is to sit out the next-generation disc market completely. And while Toshiba may have a healthy DVD business, I can’t see them yield the high-def market to the competition without any response. They’re statement seems to indicate they plan to remain a player:

“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,” said Atsutoshi Nishida, President and CEO of Toshiba Corporation. “While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality.”

Of course, there are still some unanswered questions. Will those who invested in HD DVD players recently get any compensation? (I’d guess no.) How many HD DVD owners will return their players before the return window closes? Will we see a Blu-ray drive for the Xbox 360? Would Microsoft consider bundling Blu-ray into a new model of the 360 now that there is one format, to compete more directly with the PS3? (That’s probably a stretch - but I think a BD add-on drive will happen.)

Press release picked up via EngadgetHD.

EDIT. Engadget Japan is at the Toshiba press conference. From the Q&A session:

Q: Any plans to adopt Blu-ray?
A: No plans at all, not at this moment.

Q: Are there no plans for next gen optical disc at all?
A: We don’t have any plans to announce at this time.

Of course, keep in mind that just yesterday Toshiba was stating that no final decision had been made to exit the HD DVD market. So not having any plans at this moment likely means just that - they haven’t decided exactly what they will do going forward and won’t have anything to announce until they’ve had time to formulate those plans.

Interesting to see their figures for HD DVD players sold - since it is quite a bit short of the ‘one million’ figure that the HD DVD camp oft repeated previously:

Q: How many HD DVD players and recorders, exactly, did you sell?
A: 600,000 players in the US — 300,000 of which were Xbox 360 HD DVD drives. 100,000 units were sold in Europe. And about 10,000 players and 20,000 recorders in Japan. So about 730,000 units worldwide.

EDIT 2: I see that, sometime today, Engadget edited their post and it now reads:

Q: How many HD DVD players and recorders, exactly, did you sell?
A: 600,000 players in the US and 300,000 Xbox 360 HD DVD drives. 100,000 units were sold in Europe. And about 10,000 players and 20,000 recorders in Japan. So about 1,030,000 units worldwide.

It looks like they updated it to list the 300,000 Xbox 360 drives *in addition to* the 600,000 standalone players, and not as part of that 600,000. Which puts the total just over the one million mark.