Matsushita: Market Will Decide DVD War

Matsushita, best known for its Panasonic brand, is publicly dismissing any notion of the Blur-ray and HD DVD formats merging: "The market will decide."

In comments to Reuters, Kazuhiro Tsuga, an executive at Japan’s Matsushita, has stated next-generation Blur-ray and HD DVD formats will never merge. “We are not talking and will not talk,” he said. “The market will decide the winner.”

Matsushita is the world’s largest consumer electronics manufacturer and is a strong supporter of Sony’s Blur-ray next-generation DVD technology. Blu-ray is competing with Toshiba’s HD DVD format to define the next generation of DVD media. Blur-ray is backed by major studios and will (eventually) have Sony’s Playstation 3 console game going to bat for it; HD DVD is backed by Toshiba, Intel, and Microsoft, and movie houses are increasingly straddling the fence, vowing to produce content for both formats for the immediate future. Both HD DVD and Blu-ray are off to a rocky start, with HD-DVD just barely creeping to market with a handful of titles, and Blu-ray systems still not available to consumers.

Tsuga speculated that, while Toshiba is the first to market with HD DVD systems, the company would not be able to sustain selling HD DVD players at prices as low as $499. He estimated Toshiba is taking a loss on each unit sold. Matsushita’s Panasonic-branded Blu-ray DVD players are likely to hit the U.S. market mid-year at prices in excess of $1,000. “It’s now a test of physical strength,” he said, indicating Matsushita was working hard to lower production costs and see a per-unit profit on Blu-ray player sales from the start.