Toshiba takes $1b hit for HD DVD loss

Toshiba will take a serious but far from fatal blow to its bottom line for its decision to discontinue HD DVD, according to a report by Japan's Nikkei Business Daily (account required). The electronics maker is predicted by the newspaper to be spending $986 million this quarter to ramp down its production of HD DVD players and discs at its factories as well as writing down the cost of unsold devices. The tally will significantly affect Toshiba's income but should still result in a significant profit, as official company estimates would have it generating $2.9 billion in the same period.

The former HD DVD producer has declined comment on the subject, saying through a spokeswoman that it had not announced any of its finances and so couldn't comment on Nikkei's claims.

While not a permanent blow, the income drop reflects the high cost of the dispute between HD movie formats. Sony has drawn criticism for the PlayStation 3 ever since its November 2006 launch by demanding that the console come equipped with a Blu-ray drive, which ultimately helped Sony outnumber Toshiba's HD DVD players but raised the cost of the system well above the Xbox 360 and Wii. Sony is also still known to be selling the PS3 at a loss to help drive sales.

Filed under: industry
Other story tags: sony, blu-ray, Toshiba, PS3, HD DVD