Microsoft (NASDAQ: MSFT) backed the wrong horse in the fight for high definition DVD disks and players. Redmond sided with Toshiba and its HD DVD platform and shipped the Xbox 360 with playback capacity for that platform. Sony (NYSE: SNE) backed the Blu-ray format which runs on the PS3.
Now that Wal-Mart (NYSE: WMT), Best Buy (NYSE: BBY), and NetFlix (NASDAQ: NFLX) have walked away from HD DVD, the technology is likely to be pulled from the market. According to Reuters "We do not believe the recent reports about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace," the company said. The statement should inspire some confidence, it doesn’t.
The XBox 360 has just lost and edge to PS3 in a market where it cannot give up an inch.
Douglas A. McIntyre