Toshiba, which lost the high-definition format war to Sony-backed Blu-ray, is planning to release a Blu-ray player this year, a necessary move in order to stay competitive in the HD television market.

Toshiba conceded it lost the format battle in February 2008 after Hollywood studios lined up in support of Blu-ray over the HD DVD format Toshiba backed with Microsoft and others. Sony, Panasonic, and a consortium of consumer electronics companies backed Blu-ray.

With sales of Blu-ray disc players going strong, Toshiba saw little choice but to enter the market, the Japanese newspaper Yomiuri Shimbun reportedover the weekend. Consumers are buying Blu-ray players to go with HDTVs, which is a major revenue driver for Toshiba. Without a Blu-ray player, Toshiba was leaving money on the table, so the company plans to release a play-only model by the end of the year.

Toshiba had hoped to compete against Blu-ray with other technologies. For example, in August 2008 the company introduced player technology that enhanced the picture of standard DVD to near Blu-ray-level HD quality. Toshiba sold the technology, called extended detail enhancement, in its own players.

Nevertheless, nothing Toshiba developed could compete with Blu-ray players. In the first quarter of this year, unit sales soared 72% to 400,000 and the amount of money U.S. retailers reaped rose 14% from the same period a year ago to $107.2 million, according to the NPD Group. The biggest driver behind the increases was falling player prices and rising sales of HDTVs.

In Japan, Toshiba's home turf, Blu-ray in May accounted for more than 66% of all video recorders sold, according to market research firm BCN Inc.

At the company's shareholder meeting in June, then President Atsutoshi Nishida said losing against Blu-ray would not stop the consumer electronics company from entering the player market. "It's not that we won't do it because we've lost (the format battle)," he said, according to Yomiuri Shimbun. "We'll deal with the issue flexibly."

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