Sony's Mr Blu-ray finally gets to forget Betamax

TOKYO (Reuters) - For Sony Corp’s head of video businesses, Kiyoshi Nishitani, Blu-ray’s impending victory over Toshiba Corp’s HD DVD format is something he has been working at for more than two decades.

Nishitani, a 35-year company veteran, helped develop Sony’s Betamax video tape system but the technology lost out in the 1980s to the competing VHS format, supported by JVC and Panasonic maker Matsushita Electric Industrial Co Ltd.

This time around, however, Nishitani, 57, and other company executives have made certain Sony joined hands with Matsushita and many other global electronics makers.

They also tied up the majority of Hollywood film studios, laying siege to Toshiba’s HD DVD camp, whose short list of supporters include Microsoft Corp.

The reward for his employer may include the salvation of its loss-making PlayStation 3 game console, although it may now face a battle for supremacy with other Blu-ray backers including Matsushita.

Toshiba said on Monday no decision had been make on HD DVD, but a company source told Reuters on Saturday that the company was in the final stage of planning its exit.

On a personal level, winning the format battle is music to Nishitani’s ears since it means he will be able to enjoy his collection of movies for years to come.

Nishitani, who counts watching movies as one of his favorite pastimes along with playing golf, has a wide collection of titles -- on Blu-ray discs, naturally.

Besides Sony’s public image, also at stake is the fate of its loss-making PlayStation 3 game console business, which competes with Microsoft’s Xbox 360 and Nintendo Co Ltd’s Wii.

Sony has packed its cutting-edge technology such as a Blu-ray player and the Cell microchip, dubbed “supercomputer on a chip,” in the PS3, driving up manufacturing costs.

If Toshiba’s retreat spurs demand for Sony’s Blu-ray players and recorders, it would help lower costs of Blu-ray components that go into the PS3 through economies of scale, improving profitability of its game console business.

Analysts said, however, it is too early for Nishitani, who majored in physical electronics at Tokyo Institute of Technology, to pop a champagne cork as the company faces formidable rivals and low-cost competitors within its own Blu-ray group.

“Yes, this is a positive development. Flat TVs and Blu-ray products would be the two hottest items in the holiday season this year,” Shinko Securities analyst Hideki Watanabe said.

“But Sony trails Matsushita in the business of selling key Blu-ray parts, and Funai will likely be supplying Blu-ray players to other makers for as low as about $150 a piece towards the year end, squeezing Sony’s profitability.”

Funai Electric Co Ltd, known for its low-cost manufacturing, started making Blu-ray players late last year for clients under their own brand names.

Editing by Lincoln Feast