A format battle between HD-DVD and Blu-ray Disc in the race to replace DVD looks increasingly inevitable. Supporters of both formats agree that compromise would benefit the industry, but talks are stalled, and HD-DVD backers will soon need to begin final design and development of products if they are to meet their sales schedule.

Both formats can hold considerably more data than a DVD, and are being promoted as replacements for DVD for high-definition movie content.

The HD-DVD group has committed to having products available before the end of 2005. It typically requires two to three months to bring a product to market from the beginning of design, so with just over four months left until the end of the year there's not much time for talk. Waiting longer would leave the market open for Blu-ray.

"Our stance hasn't changed," said Junko Furuta, a representative of Toshiba, one of the main backers of HD-DVD, on Tuesday. "We think a single format is best and we are still open to discussions."

Sony, a major backer of Blu-ray, is also open to discussions, according to Taro Takamine, a company spokesman. He said the Blu-ray Disc Group's stance hasn't changed, and that it continues to believe that its format is best for the future needs of the consumer electronics, computer gaming and PC data storage markets.

The format battle, which is widely acknowledged by all participants to be against the interests of the entire IT and consumer electronics industry and its customers, has been brewing since late 2002, when Toshiba and NEC proposed their format, called Advanced Optical Disc at the time, to the DVD Forum several months after Blu-ray was announced.

Earlier this year the battle started getting more serious. In April talks took place, but they got nowhere.

At a news conference on 28 June Atsutoshi Nishida, the new CEO of Toshiba, again called for talks. "We need to be willing to integrate," he said.

However, at present there are no talks taking place between the two sides, Furuta said. Japan's mass-market Yomiuri Shimbun newspaper reported on Tuesday that executives at both companies have given up hope of a compromise.

It's not just consumers that will lose out if such a contest does happen. Equipment makers are likely to suffer lower sales because consumers are expected to put off purchases. Content producers such as movie studios will also probably lose out because of lower demand.