The two-year period between HD DVD's launch and its defeat by Sony's Blu-ray was a period of sustained growth in global markets marked by increasing convergence in the filmed entertainment, consumer electronics, gaming, and IT industries. Franchise films returned record revenues at the box office as well as in ancillary markets. In the consumer electronics market high-definition televisions, new video game consoles and software, and laptop computers returned healthy profits for their makers. The format battle over high-definition discs represented an effort by two competing firms to take advantage of this convergence and prosperity, offering consumers high-definition disc players capable of playing content for their new HDTVs, computers, and gaming consoles. The stakes in this battle were high; the winner would control licensing and patent revenues for a hardware market that could return billions in revenues. Sony and Toshiba hoped consumers would replace their existing DVD players with high-definition ones, with the American DVD player market representing more than 133 million potential converters alone ( ). Both Sony and Toshiba designed their technologies to offer a relative advantage over DVD; high-definition players could play full 1080p content, were designed to play DVDs as well as HD discs, were capable of offering interactive features and Internet connectivity, and could function on HD computer drives and new gaming consoles. However, the two technologies were not cross-compatible, as Sony's player would not play Toshiba's discs and vice versa. With both technologies offering similar storage capacity, functionality, and relative advantage over DVD, the format battle appeared to be one that could linger for years.
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