Fate has not been kind to Nishida's plans. One of the centerpieces of that plan, Toshiba's HD DVD format, is desperately looking for a lifeline after a series of major disappointments that culminated June 18 with video rental chain Blockbuster (BBL) announcing it would expand next-generation DVD rentals to 1,700 company-owned stores from 250, but only in the rival Blu-ray format. "Blu-ray rentals are significantly outpacing HD DVD rentals," Blockbuster said in a statement.

The move clearly is a major blow to HD DVD. Video rentals typically account for a huge chunk of home movie viewing. They tend to be more important in the early days of a new format, before disks get cheap enough to become an impulse buy. "Blockbuster is still your corner DVD store," says Tim Bajarin, president of tech consultancy Creative Strategies. "They are a very strong presence and are a very strong influence on the market."