The HD-DVD format was approved as a new type of media in 2003 by the DVD Forum. The main developers and supporters of this format were Toshiba, NEC and Microsoft. It also had the support of major producers such as Universal Studios, Paramount Pictures and Warner Bros.
Microsoft also added an HD-DVD player to the Xbox 360, which was its big entry into the gaming industry. Despite all this support, it had a tough time competing with Blu-ray. So much so that it eventually disappeared due to Blu-ray’s great capabilities and the great support it received.
Toshiba and Microsoft, the great supporters of HD DVD
To start with, you should know that this new format is coming to leave DVDs behind. The new HD DVD format offered a capacity of 15 TB on single-layer discs and up to 30 TB on double-layer discs. Normal DVDs had a capacity of 4.7 GB and double-layer models offered 8.5 GB of capacity. We are talking about an increase in capacity of between 4-2 times for single-layer HD DVDs and 8-4 times for double-layer ones. Note that this format only accepted video in FullHD resolution (1080p).
The problem with HD DVD was that Blu-ray was launched shortly after. The developers of this new format were Sony, Panasonic, Philips and Microsoft. This new format had 25 GB per single-layer disc and up to 50 GB of capacity per dual-layer disc.
In addition, this new format offered support for 4K video resolution. Finally, it is worth noting that Blu-ray was supported by Disney, Warner Bros, 20th Century Fox and Sony Pictures.
For a year or so, they competed for market share. It was from 2007 onwards that HD DVD began to decline, with the launch of the PS3. Sony launched this console with a Blu-ray player, something that created a huge problem for HD DVD. Only a year later, Toshiba announced the cessation of production of these optical discs and players.
A failure that almost bankrupted Toshiba
The company had been in a difficult financial situation for some time, but the HD DVD format finally brought it to a head. Toshiba invested a lot of money in the development and promotion of this format, even paying for some films and games to be released only in this format. Amounts of money that they would never recover.
Adding to the problem, the European Commission filed an antitrust suit against Toshiba for its involvement in the DVD Forum. The suit alleged that the company had used its position to favour the new format over Blu-ray. In the end, Toshiba had to pay a fine of 129 million Euros, which only made matters worse.
Due to the huge failure of this format, many investors sold their shares. Moreover, after the European Commission filed a lawsuit, investors did not want to invest their funds in the company.
A set of circumstances that have kept Toshiba from recovering since then. The final straw came in 2015, when the company was involved in an accounting scandal that cost it tens of millions of euros.
As a result of this scandal and the failure of HD DVD, Toshiba went bankrupt and was acquired by the Japan Industries Solutions Corporation. In order to bail the company out, this consortium began to break up the company and sell off the most profitable parts that could generate quick revenue to pay off debts.