In Sony's Stumble, the Ghost of Betamax

By KEN BELSON The New York Times February 26, 2006

AT first glance, Amir Majidimehr does not look like a game-changer in the battle to develop the next generation of DVD players and discs. As the vice president for Windows digital media at Microsoft, he neither steers a Hollywood studio nor controls one of the many consumer electronics giants that are betting billions of dollars on one of the two new formats that promise to play high-definition movies and television shows.

Yet when he and his team in Redmond, Wash., decided last September to abandon their neutral stance and to support Toshiba and its HD-DVD standard over the Blu-ray format led by Sony, the unexpected change of heart reverberated through the technology industry.

Suddenly, Toshiba's seemingly quixotic defense of its format had new life. Intel joined Microsoft in backing HD-DVD. Hewlett-Packard withdrew its exclusive support of Blu-ray. This month, another member of the Blu-ray camp, LG Electronics, hedged its bets, too, signing a deal to license Toshiba's technology.

And earlier this month, one of the main reasons underpinning Microsoft's move to shuck its neutrality - the complexity of producing Blu-ray technology - led to Sony's acknowledgment that it might delay this spring's scheduled release of its PlayStation 3 game console partly because the needed technology was still being worked out.

The possible delay and the Blu-ray group's loss of its once-commanding lead are not encouraging developments for Sony in its attempt to revive its electronics group after a series of bungles. PlayStation 3 is crucial to Sony's future, and not only because the latest version of its gaming consoles could generate billions in revenue; the new machines will include disc drives that will turn them into Blu-ray DVD players as well.

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