Emma Boyes
Sony's shares gained nearly five per cent yesterday on news that Toshiba will be bowing out of the high-definition format war, reports Reuters. The announcement that it will cease production of HD DVD players before the end of April leaves Blu-ray, which is integrated into the PlayStation 3, as the victorious format.
Sony's stock in the US hit a high of $47.07 in early trade on the New York Stock Exchange, before dropping slightly to $46.96, up $2.18, or 4.87 per cent from Friday's close.
Analysts were in agreement that the demise of HD DVD was a boon for Sony and could ultimately be bad news for Microsoft's Xbox 360. William Blair & Company analyst Ralph Shackart said, "We believe Blu-ray's victory could drive market share gains for the PS3, as we believe consumers will now be more willing to pay up for the standard Blu-ray player."
Wedbush Morgan Securities' Michael Pachter told CNET.co.uk's sister site GameSpot that he agreed. "Educated consumers who have been holding off buying on the format war to make a decision will now probably buy a PS3. Uneducated consumers who have no idea that there was a format war are likely to get pushed to buy a PS3 by sales clerks. Retail sales clerks being what they are, they are now really, really going to push sales of Blu-ray, and therefore the PS3."
Pachter believes that by the end of this year, the PS3 is likely to emerge victorious in the console war. He told GameSpot, "The real problem for the 360 is that very few people will buy a 360 and a PS3. So therefore, every PS3 sale will likely mean that person won't buy a 360, so this news will ultimately hurt 360 sales. But I don't think it will hurt the Wii. If I had to bet, I'd say Microsoft gets no more than 30 per cent of the total install base, and Sony and Microsoft slug it out, and Sony will ultimately prevail."
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