Microsoft-Toshiba Alliance

In what is sure to be a big boost for the HD DVD format, Microsoft and Toshiba announced on Monday that they have formed a partnership to co-develop HD DVD players among other joint activities. Now that unification talks with the Blu-ray camp seem to have completely stalled, this sets the stage for a rip-roaring battle royale with Sony, Apple Computer, and the other Blu-ray supporters.

Monday's announcement is an expansion of the April partnership pact, Microsoft's first with a major Japanese CE manufacturer, to share AV and computer technologies between the two companies. One likely result is the appearance of an HD DVD drive in the new Xbox 360, though the game console will probably be introduced with conventional a DVD drive at first in order to prevent further delays and miss the 2005 holiday shopping season. For their part, Toshiba announced plans to design a player based on Windows CE, but neither company would say when such a device would be available to consumers.

As Toshiba President Atsutoshi Nishida noted at a press conference in Tokyo, "We feel we have gained a powerful supporter on our side." Also in attendance was Microsoft Chairman Bill Gates, who said, "This agreement demonstrates our desire to share our innovations with other companies in ways that promote the spread of new ideas."