The company's statement followed reports in Japanese media over the weekend that Toshiba was considering abandoning the format after losing the backing of key retailers and film studios in favour of Blu-Ray.

 

Blu-Ray is backed by a consortium of manufacturers led by Sony and Matsushita, owner of the Panasonic brand, and has been gaining market share.

 

Write-off

 

Next generation DVD

Both HD DVD and Blu-Ray use blue lasers to read the disks which have a shorter wavelength than red lasers used on older DVD players

 

That means disks can hold much more information needed for high definition audio and video

 

Blu-Ray disks hold up to 50GB, while HD DVD disks hold 30GB. A standard DVD can hold just under 5GB

 

Blu-Ray backers include Sony, Matsushita (Panasonic), Samsung and Apple

 

HD DVD backers include Toshiba, NEC and Microsoft

Toshiba has invested hundreds of millions of dollars in developing and marketing HD DVD and faces a significant write-off in abandoning the format.

 

The expected collapse of HD DVD is also likely to deal a heavy blow to Microsoft, which had backed the format, incorporating a player into its latest Xbox 360 gaming consoles.

 

On Friday US retail giant Wal-Mart announced it was halting sales of HD DVD players and recorders in a move that many analysts saw as a possible final nail in the coffin for the format.

 

Days earlier US online movie rental firm Netflix announced it was also phasing out HD DVD disks in favour of Blu-Ray.

 

Last month Warner Brothers became the latest in a line of Hollywood film studios to back the Blu-Ray standard, saying it would no longer release films on HD DVD disks.  

 

Analysts say Sony did a better job of tying in
movie studios to Blu-Ray [GALLO/GETTY]

Warner had been the last major studio to release DVDs in both formats, while Paramount now remains the only studio loyal to HD-DVD.

 

Both Blu-Ray and HD DVD deliver superior video and audio quality compared with standard DVDs, but they are incompatible with each other.

 

 

Analysts say the rival formats led many consumers to avoid upgrading to high-definition DVD players because they were unwilling to invest in technology that may become obsolete.

 

Toshiba was also criticised for poor marketing and its failure to secure solid backing from Hollywood for the HD DVD format.

 

Sony, by contrast, was able to use its own strong connections to the film industry to woo five of the big seven studios over to Blu-Ray.

 

The battle over the next generation DVD formats had been likened to the home video tape war of the 1980s between VHS, developed by JVC, and Betamax, backed by Sony.

 

Betamax eventually lost out in the consumer market, despite its superior picture quality.

 

This time, it seems, Sony may have backed a winner.