Microsoft to Pay up to OEMs For Using HD DVD

[Jeremy Charette]

<div class='os_post_top_link'><a href='http://digitalcameras.engadget.com/2005/12/29/microsoft-to-pay-up-to-oems-for-using-hd-dvd/' target='_blank'>http://digitalcameras.engadget.com/2005/12/29/microsoft-to-pay-up-to-oems-for-using-hd-dvd/</a><br /><br /></div><i>"Microsoft must apparently have a lot more at stake in the success of HD DVD than we realized, since apparently they're said to be offering up "coupons" -- or certain cash incentives -- to manufacturers who use HD DVD drives in their future machines. According to the EE Times, Microsoft is also making HD DVD support "free" in Vista, whereas they're charging up to $30 in licensing for Blu-ray support."</i><br /><br /> <img src="http://www.digitalmediathoughts.com/images/198610.jpg" /> <br /><br />Several columnists and writers have recently expressed surprise at Microsoft's vigorous support of HD DVD. They all seem to be forgetting one thing: the HD DVD compression standard is based on Microsoft's Windows Media Video (WMV) format. Microsoft stands to make a sizable sum of money from the HD DVD license. Therefore, they have a vested interest in making sure it succeeds in defeating Blu-Ray. And believe me, they will. Microsoft does not enter any market with the expectation of losing. Just look at the losses they've taken on the Xbox division over the past five years.

[Felix Torres]

Actually, the WMV-derived VC-1 spec is part of *both* HD-DVD and BD-ROM. Sony fought tooth and nail against endorsement of VC-1 but all the other ducks lined up too strongly in favor for them to block it. Their use of MPEG2 for their BD-ROM movies is another attempt to marginalize VC-1 (and MPEG4).
But even on BD-ROM, some content providers (WB for one) are going to use red-laser substrates with VC-1 instead of Sony's proprietary blue laser substrate for costs savings purposes.
This is most likely a shot across the bow from MS to Sony to force them to lower the Blu-ray licenses to whatever sweetheart level Toshiba gave MS (free?) and to force them to support the other PC-friendly techs adopted by HD-DVD that Sony refuses to support.
Add in that Toshiba has demostrated production-level hybrid and multi-layer HD-DVDs, while the BluRay equivalents are still lab specimens, and worse, Toshiba lined up China, Inc to make cheap players and the format war is about to get very bloody.
This one is going to the mattresses.