Microsoft's off the hook - HD-DVD delayed to 2006:

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http://gamesindustry.biz/content_page.php?aid=11260

Toshiba considers pushing back HD-DVD launch to 2006
Ellie Gibson 14:40 02/09/2005

Head start over Blu-Ray now in doubt as rival re-evaluates proposed
deadline

Toshiba has announced that its next-generation HD-DVD players may not
now go on sale until next year, despite earlier suggestions that the
new format would launch by Christmas.

"We originally aimed for the year-end launch in the United States, but
we have not really decided on that," said a spokesperson, adding that
the Japanese launch could also be delayed until 2006.

"We are now in talks with Hollywood studios and large-scale retailers
to see the most effective timing of the launch and the best way to
launch."

The news will no doubt be welcomed by Sony, which is leading the charge
for the rival Blu-Ray format - due to debut early next year - since it
now seems Toshiba will lose out on a first-mover advantage and
Christmas sales.

Blu-Ray discs are more technically advanced and have a higher storage
capacity than HD-DVD, but Toshiba claims they are too expensive to
produce. Talks between the two camps to discuss producing a unified
format broke down once again recently and have now been suspended
indefinitely.

"We may actually have a situation where merchandise from both sides is
put on store shelves," commented Toshiba president Tadashi Okamura.

"But the market would not allow that situation to last very long."