Sony shares increase after Time Warner gets behind Blu-ray

When Time Warner, Inc. (NYSE: TWX)'s Warner Bros. abruptly dropped support for the HD DVD high-definition disc format this past weekend to focus solely on format competitor Blu-ray, HD DVD primary backer Toshiba Corp. (OTC: TOSBF) began to get really nervous. After all, this ridiculous next-generation format war (like the VHS vs. Betamax wars of the 1980s) was keeping many customers from buying a newer, high-definition DVD player for fear of buying something that would soon become obsolete.

Sony Corp. (NYSE: SNE), on the other hand, was probably cheering in all its executive offices. Sony, who has more Blu-ray-capable DVD players sold than any other company in the form of PlayStation 3 game consoles, has been Toshiba's mortal enemy in the race to win the single-format, high-definition DVD war that started raging in 2007.

Investors liked the Warner Bros. announcement also, and Sony saw its shares edging higher this morning (up almost 3%). With Time Warner on board, 70% of all major films will now see DVD releases on the Blu-ray format. Some have even gone so far to say that HD DVD is now dead, even as it just started growing. Consumers will win with one standard, but some companies -- like Toshiba and Microsoft Corp. (NASDAQ: MSFT) -- will stand to lose at least a piece of their collective shirts. That's a format war for you.