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After HD DVD Drop, Toshiba Spends $835M to Back PS3

Sony gives Toshiba something in return for its troubles -- Japanese Cell chip plants for $835M

A new twist has emerged with the death of HD DVD. After Warner, Best Buy, Walmart and Netflix jumped on the Blu bandwagon, the fate of HD DVD was already sealed.

Despite the grim news, the principle HD DVD developer, Toshiba Corporation, refused to initially comment on its plans for its HD DVD. However, as many analysts predicted, Toshiba came out last week and officially surrendered to Blu-ray.

Many saw Toshiba's willingness to give up on HD DVD as a logical business decision and perhaps an admission of Blu-ray's superiority. However, there might be a little more to the story. Reuters reports that on Wednesday Toshiba and Sony Corporation, one of Blu-ray's principle developers, agreed to a major business deal, reached just after Toshiba made its final HD DVD decision.

Sony agreed to sell it microchip processing facilities in western Japan for approximately $835M USD. These facilities currently produce Cell processors and RSX graphic chips. Toshiba will enter the joint venture with Sony on April 1, 2008.

Toshiba, IBM and Sony were the principle developers of the Cell microprocessor, but Toshiba previously showed little interest in using the chip for any of its own projects. Sony touts the Cell broadband engine in its Playstation 3 consoles; IBM uses the Cell processor in high performance computing clusters. Toshiba has vowed to now use the Cell in its upcoming products.

While Toshiba and Sony entered into talks back in October 2007 and reached a tentative agreement to sell the cell facilities, the two companies continued to haggle about the price. Sony's concession of what is considered a favorable price for Toshiba will likely strike many following Toshiba's drop as HD DVD as more than a coincidence, and perhaps a sign of an informal agreement.

The other interesting aspect of the move is that it indicates a clear shift by Toshiba to back the PS3. The PS3, which last month outsold Microsoft's Xbox 360, previously had few ties to the company; while Microsoft's number one ally in hardware manufacturing has always been Toshiba. Toshiba manufacturers several components for the Xbox 360, including the HD DVD add-on, and the Microsoft Zune MP3 players.

Toshiba's flip-flop may have been in the cards for a while. Microsoft showed little remose as HD DVD took second place to Blu-ray; a move Toshiba must have recognized from its American ally. Now the solidified PS3 venture between Sony and Toshiba indicates that Toshiba now has switched to backing the PS3 almost exclusively, another victory for Sony.

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Reason I'm bringing this topic back is I just started researching Blu-Ray players today and reading reviews on sites like amazon and circuit city gives me mixed feelings. The only reason I think it would be pointless to buy a PS3 is 'cause I only play PC games now. And most people that give Blu-Ray players bad reviews say they just went and got a PS3. But some people that gave them good reviews said the people in stores recommended the PS3 but they ended up liking their Blu-Ray players.

I've been thinking about the Samsung one that's like 400 bux mainly because it would be convenient seeing as how we already have a Samsung HD TV. That and it comes with an ethernet port for updates which brings me to the next topic. Firmware. VHS and DVD players never had all these factors to worry about. Just put the DVD or VHS in and you were good. But now people have to download these firmware updates. What I didn't know before researching is Blu-Ray players can play DVDs as well and upconvert 'em to look better which is really cool to me.

But I heard Blu-Ray discs are the way to go and as soon as I get the Blu-Ray player, that's all I'm going to be buying. But I have heard a lot of people complaining about Live Free or Die Hard. I was wondering if anybody here has had those problems. And I have also been looking at the Sony Blu-Ray player which is also 400 bux but that doesn't seem to have the ethernet port for the firmware downloads although I heard the process is quite easy without it once you learn it all. Anyways, any help with this would be much appreciated.

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