I believe that there are serious potential benefits for Toshiba and and its partners, gamers, high-definition film buffs and most importantly me in a continued effort to help HD DVD survive.

Toshiba benefits from the continued survival of HD DVD for three reasons:

    Prestige

    HD DVD royalties

    Continued high-defintion confusion GREATLY enhances Toshiba's regular DVD royalties

Gamers and high-definition film buffs benefit because:

     Toshiba's extremely competitive pricing has forced Blu-Ray players to pricing levels they would never have      seen at this point in their lifetime.  This obviously includes downward pressure on the cost of the PS3 to          consumers (Sony's primary Blu-Ray player)

     Falls in Blu-Ray player prices will come to a very abrupt halt if HD DVD ceases to make any progress and is      no longer a threat.  Someone on this site (LordofthenightKnight) already pointed out that Blu-Ray's aim          should be to attain mass market adoption.  Unfortunately Blu-Ray manufacturers have no intention of              speeding this process along if they are making a nice premium on prices at the moment.

Why do I care?

    I will eventually own a PS3, but I would like to do so at a cheaper price.  I would also like to own one,             universally accepted high-definition dvd player, but am in no hurry to own it.  It is now 95-5 AGAINST any         chance HD DVD will be this format, however there is a good chance that HD DVD's backers could delay             Blu-Ray dominance, forcing manufacturers (especially Sony) to drop prices to establish a universal market.         share.

What could Toshiba and it's partners do?

    This depends almost entirely on how much Toshiba thinks it can make from continued DVD dominance, how     much market share it thinks HD DVD could permanantly take, and whether Microsoft sees a continued             benefit in delaying a definate determination of the console wars. Possible action includes:

    Continued drastic subsidisation of Toshiba's HD DVD models and Microsoft's Xbox 360 add on.

    The purchasing on between 6 and 18 months worth of exclusivity of a major studio.  (If rumours of a                 pay-off to fox and Warner are true, then it is not legally possible to bring them over, however Disney is             another option). 

    Extraordinary pack-in deals (movie pack-ins). 

No, we as consumers lose if hd-dvd attempts to "fight back".

Hd-dvd has nothing left, Warner companies NBC and HBO HD will soon go Blu and I will finally be able to purchase Entourage in 1080p. Let's all get behind one format, BLURAY.

Technically you can all do us a favor and get with the program (support bluray)..or continue wasting all of our time with hd-dvd...it's THAT simple.

Kn agrees, he says some competition will drop prices down

Actually it's not. If I purchase a PS3 with it's Blu-Ray capabilities in a year, but HD DVD died tomorrow, it is unlikely that the PS3 and particularly other Blu-Ray players will have come down in price.

On the other hand, if HD DVD survives for another year and continues to move units, you can bet your bottom dollar that there will be more substantial price cuts to stand-alone Blu-Ray players, and additional downward pressure on the price of the PS3. Please explain to me inFamous, why lower prices are not good for the consumer. And unless you actually work for Toshiba, please explain to me why HD DVD wastes your time specifically?

Compete until Digital distribution is everywhere, then we won't need them

Agreed, both of these formats are bad for the consumer in some way. I don't want a libdvdcss style situation again just to play legally bought movies on my computer.

Alright first of all, Bluray standalone prices haven't gone down at any significant rate, nor have bluray content prices. The reason being a clear indication that hd-dvd has been going absolutely NOWHERE... When your literally being outsold 30:1 in Japan on content alone, it's plain obvious that the hd-dvd format just isn't a threat.

IF hd-dvd "survives" it will create more consumer confusion over yet another lackluster propaganda toshiba/ms media campaign year. All I hear on here is how apparently members on this forum can freely speak for the entire consumer market and label this format war "confusion at best" ...well you take out the hd-dvd factor and that "confusion" becomes a stable reality..a reality in which Bluray has no competition, is a UNIFIED FORMAT and ALTHOUGH prices may stay $5-$10 dollars higher for content sales, in the end Bluray adoption will triple and we will be able to look back on all of this and laugh.

YOUR definition of "lower prices" means 12 months (at the least) of consumer confusion, battle within camps and an overall stranglehold of fear on the consumer high definiton market.

Instead of "talking" about the issue Warners has gone ahead and SOLVED it. Can't put it any simpler then that..believe me that extra $5 for Casino Royale isn't going to dent your wallet lol. In worst case scenario..just rent the damn thing lol!

^Nah, i'd rather just torrent it

 Lol.  Just over a year ago the price of a stand alone Blu-Ray player was over $1000 and they can now be bought at under $300.  Exactly what would you consider to be a significant rate of price cutting?

Blu-Ray has an enormous amount of competition in the form of digital distribution and the big one Toshiba-owned DVD.  DVD is the main competitor to either High-Def format and will remain so for years.

That last highlighted bit is ridiculous.  The rate at which DVD players and upscalers are outselling high-def players is ridiculous.  "Stranglehold of fear"? What is this? Us versus Al Quada?  My definition of "lower prices" is COMPETITION!!! 

More nonsense ...
All of this is BS, we don't need two formats, they are detrimental.
The most hardcore of early adopters had to buy TWO different players to be able to use HD media , which is more expensive.
The competition argument would make sense, if both players got the exact same movie titles. But they didn't, so there was no competition on price. The heated competition was on exclusive titles : this is when competition is not good anymore.
There's a reason people don't want format war.

Now, we don't need HD-DVD to compete againts Blu-Ray for prices to fall.
Because Blu-Ray has to compete with DVD, like LD had to compete with VHS.
And Blu-Ray just will fail like LD if it doesn't come reasonnably down on price fast enough.

People that tout for digital distribution are just as silly. Just look at Tivo's market and its price.
Tivo doesn't even come with the necessary disk space to be used as an effective DVR for HD content.
The consumer grade product to tackle digital distribution downloads would have to be better than that. And consumer grade means it won't be a console anyway, except for early adopters.
Tivo is loosing money already, despite using Linux in its boxes, so for now, I see no consumer grade VOD box which can be cheaper and better than Blu-Ray players, which already will have a tough time.
You can talk digital download perhaps 5 years from now (2012), but not before.