1. Why did both Sony and Toshiba perceive it to be so important to get an early lead in sales?

2. What strategies and assets enabled Sony to win this format war?

3. What might Toshiba have done that might have led to a different outcome?

4. The companies that developed first generation DVD technology decided not to compete on technology, instead harmonizing their technology under the auspices of the DVD forum. Why do you think they chose a different approach this time around?

5. What are the risks associated with fighting a format war like this?

Blu-Ray versus hd DVD

There was a format war developing between two different formats for the next generation of HD DVDs. Sony is pushing Blu-ray format; Toshiba is supporting the HD DVD format. Both offer improvements in picture and sound quality over current DVD technology and will work with high definition televisions. Each system will work with previous DVDs but will not work with the other. This format war is similar to the wars between VHS and Betamax videocassettes, or Windows and Macintosh computer operating systems. These conflicts tend to be winner take all battles. Both companies are working hard to take the lead. The theory is that the more units sold of a format, the more discs for that format will be offered, which, in turn, will lead to greater sales of the unit. The companies have been getting the film studios to commit to a particular format. Sony initially had the upper hand, with many studios and technology companies on its side. However, engineering delays in introducing the P3 video console based on Blu-ray allowed Microsoft to surge ahead using the HD DVD system in its video system. Additionally, the Sony systems were twice as expensive as the HD DVD and some of the early units were flawed. Some of Sony’s partners have started to hedge their bets and support both standards.