The two US technology titans have pledged their technical and marketing expertise for the HD DVD format developed by a group led by Toshiba.
The product is set to go head-to-head with Sony's Blu-ray in a replay of the rivalry a generation ago between VHS and Sony's ill-fated Betamax, which eventually lost out as customers opted for its rival.
"I believe that it is still an open race," said Carlos Dimas, a consumer electronics analyst at CLSA Asia-Pacific Markets.
"We are still heading to a new format war in DVD recorders."
The stakes are high for Sony, which is struggling to revive its core electronics business and has just forecast a loss of 10 billion yen ($90 million) in the financial year to March 2006.
"We are trying to gain the support of manufacturers and Hollywood [studios] for Blu-ray," Sony president Ryoji Chubachi told reporters.
"As we previously said there were some efforts to have a common standard. Unfortunately we didn't reach an agreement. We do not have any program under which we will sit at the same table [with Toshiba]."
Microsoft and Intel, crucial players in the standoff as customers are increasingly using their computers to play DVDs, had previously refrained from backing either side as they sell software and components to both.
"We'd been hoping the two groups would find a common format for the sake of consumers' benefit but apparently those efforts failed," said Masatoshi Mizuno, a spokesman for Intel in Japan.
Microsoft now plans to incorporate software supporting Toshiba's DVD format in its next operating system, Windows Vista, said Microsoft spokesman Kazunori Ishii.
It also raises the possibility that Microsoft might design software to allow its new Xbox games console to play the HD DVD discs after the product hits the market later this year, putting more pressure on rival Sony's PlayStation.
Sony has an advantage in that its own format will reach thousands of homes in the PlayStation3 video games console due for launch early next year.
Hollywood studios, that could ultimately decide the fate of the two formats, are split in their support for Toshiba or Sony.
Next-generation DVDs, expected to hit the mass market later this year, are billed as offering cinematic quality images and opening up new possibilities in interactive entertainment.
Sony's Blu-ray disc is expected to have a greater storage capacity than the HD DVD but also to be more expensive to make, at least in the short term, as the format has greater differences from current-generation DVDs.
Supporters of the Blu-ray technology include Apple Computer, Dell, Hewlett-Packard and Samsung Electronics.
Among Hollywood studios, Walt Disney and Sony Pictures Entertainment back Blu-ray, while HD DVD supporters include Paramount Pictures, Universal Pictures and Warner Brothers Studios.
"I think that ultimately the grouping that will have the deciding power is the movie studios in the US because they've got to feel comfortable in term of the intellectual property management of the movies," said Dimas of CLSA.
"They've got to decide what standard is more efficient in economic terms."
© 2005 Agence France-Presse
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