That's Just How the Chips Fall
February 28, 2008

The death of HD DVD is hurting more than just Toshiba. There are a lot of companies responsible for making key parts of HD DVD hardware that have been dealt a financial blow as well, according to this Dow Jones story about semiconductor chip makers.
Most of the lost dough comes from now fruitless research and development costs companies like Japan's NEC and Broadcom spent while creating chips for HD DVD players. The companies had yet to really turn a profit from the chips, as HD DVD was always a fledgling format. But such R&D expenses are steep, typically representing 30% to 40% of overall chip design costs.
Broadcom was expressly focusing on dual format players, which appear just as unviable as HD DVD standalones. Why pay relatively more for a dual format player when you only need half of it to see all of the forthcoming movies in high-definition? 
Like Universal and Paramount, these companies will have to make the switch to Blu-ray.  But if they're already in the hole on high-def, I wonder if they'll bother to dig themselves out at all to work to go Blu.
Hopefully, the Blu-ray manufacturers/studios will work to help get these guys in the fold. Entice them with free movie tickets? Who knows? But the more companies that support Blu-ray, the better it will be to really establish this format. 

Posted by Susanne Ault on February 28, 2008 | Comments (0)