Sony, Microsoft Square Off Over DVDs

By Julie Tamaki

Tech titans Microsoft Corp. and Intel Corp. today said they will back HD DVD as their choice for the next generation of DVDs, joining Toshiba Corp., Universal Studios and others — and pitting them against Sony Corp. and its rival Blu-ray format.

Both formats offer crisper pictures but are incompatible. Backers acknowledge that consumers, retailers, studios and most device makers would be better off with a single standard — avoiding a replay of the VHS- Betamax videotape fight. As products head to market, though, neither side is backing down.

Support from Microsoft and Intel could boost the HD DVD camp. Microsoft said it will build support for HD DVD into the next version of Windows, called Vista. For its part, Intel will make its upcoming Viiv technology for multimedia work with HD DVD.

“The great thing about HD DVD is that it provides the cool consumer benefits we’re looking for,” such as the ability to play standard DVDs, said Stephen Balogh, Intel’s director of optical media standards.

That support puts Intel and Microsft at odds with some of its biggest customers: Apple Computer Inc., Dell Inc. and Hewlett Packard Co. back Blu-ray. “We don’t see this announcement as anything that will shift the momentum that Blu-ray Disc has experienced,” said Josh Peterson, HP’s director of strategic alliances and a Blu-ray spokesman.

Analyst Richard Doherty of the Envisioneering Group, though, said, “Most of the PC makers, while they have their own research and development departments, pretty much go to market with what Intel makes available to them.”

HD DVD will offer consumers the ability to keep on their PCs a copy of a movie that can be streamed to other devices in the home. It also allows studios to store high definition and standard versions of a movie on a disk.

Blair Westlake, vice president of Microsoft’s Media/ Entertainment and Technology Convergence Group, said the HD DVD camp also has made inroads with manufacturers in China, where most of the world’s DVD players are currently built. Without that support, it would be difficult to deploy the technology quickly at a low price.

A big question: Whether Microsoft will include HD DVD in future versions of its Xbox 360 video game console the way Sony is building Blu-ray into its PlayStation 3 machine. A Microsoft spokeswoman said the company’s Xbox 360 will ship this fall with a standard DVD drive.