Toshiba spent $986M on HD DVD — then lost the format war to Blu-ray

In 2006, Toshiba launched HD DVD, a high-definition optical disc format, competing directly against Sony's Blu-ray. The format war was reminiscent of VHS vs Betamax — two incompatible standards fighting for the same market. Toshiba had strong backing from Microsoft and Intel, while Sony had the PlayStation 3 and a broader studio coalition.

The war was decided by content deals. Sony's PlayStation 3 shipped with a built-in Blu-ray player, giving the format a massive installed-base advantage. But the decisive blow came in January 2008 when Warner Bros., the only major studio supporting both formats, announced it would release exclusively on Blu-ray. Best Buy and Netflix followed, phasing out HD DVD. Paramount had a temporary exclusive HD DVD deal, but it was not enough to reverse the momentum.

Toshiba conceded on February 19, 2008, halting production and taking a $986 million loss. The HD DVD Promotion Group dissolved the following month. The format war cost Toshiba nearly a billion dollars and demonstrated that in a format war, content and installed base matter more than technical superiority.