Toshiba losing money in HD DVD business

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Toshiba also said it would rack up a 65 billion yen ($666 million) operating loss in its HD DVD business.

Last month, Toshiba acknowledged defeat in the battle to establish an industry standard for high-definition video, handing victory to the competing Blu-ray disc format. Toshiba said it will no longer develop, make or market HD DVD players and recorders.

The Japanese electronics maker lowered its group profit forecast for the fiscal year ending March 31 to 125 billion yen ($1.26 billion), down from the initial forecast for 180 billion yen profit. Toshiba Corp. had earned a 137 billion yen profit the previous fiscal year.

Toshiba also lowered its sales projection for the fiscal year ending March 31 to 7.7 trillion yen ($78 billion) from the earlier 7.8 trillion yen.

A decline in prices for flash memory chips, devices for mobile phones, digital music players and other gadgets, also contributed to the sales drop, the company said.

The move to discontinue its HD DVD business ended the format war over high-definition disc formatting that began several years ago. Blu-ray - backed by Sony Corp., Matsushita Electric Industrial Co., which makes Panasonic brand products, and five major Hollywood movie studios - emerged the winner.

The decision by Warner Bros. Entertainment to release movie discs only in the Blu-ray format dealt the final blow, although Toshiba executives had repeatedly said they were confident of HD DVD as a technology.

Warner joined Sony Pictures, Walt Disney Co. and News Corp.'s Twentieth Century Fox in adopting Blu-ray as the standard.

Universal Studios, Paramount Pictures and DreamWorks Animation had signed on to make HD DVD movies.

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