According to various media reports from Japan, Toshiba is planning to drop HD DVD format, ending an intense battle over next-generation optical formats against Sony’s Blu-Ray technology.

For example, the Associated Press reported that Kyodo News agency said Toshiba is reviewing its operations, with the timing of the withdrawal to be decided later. However, there is no official confirmation.

In addition, The Korea Times reported that Samsung is expected to accelerate its ongoing efforts to strengthen Blu-Ray products since “Toshiba virtually pulled the plug on its HD DVD products”.

The first reports about Toshiba’s decision emerged just one day after U.S. retail giant Wal-Mart announced it would promote mainly Blu-Ray movies and players. The company explained that its decision was influenced by its customers’ choice.

"We’ve listened to our customers, who are showing a clear preference toward Blu-Ray products and movies with their purchases," said Gary Severson, senior vice president, Home Entertainment, Wal-Mart, U.S.

Last month, Warner Bros. Entertainment decided to make Blu-Ray its exclusive high-definition format. Two major Hollywood studios Paramount and Universal are still backing up the HD DVD format, but if Toshiba will decide to throw in the towel, they will be released from their commitments.

In the past weeks, following Warner’s announcement, major retailers like consumer electronics giant Best Buy and online video rental company NetFlix sided with Blu-Ray. Blockbuster and Target expressed their support for Blu-Ray format last year.

In January, the British store chain Woolworths announced it would turn exclusively to selling Blu-Ray, which means HD DVD will no longer be available for sale.

In September 2007 China Film Group, one of China’s largest film distribution groups, has also adopted Sony’s Blu-Ray. All these announcements put pressure on Toshiba to consider its options.

In its last strength to survive the fierce competition with Blu-Ray, Toshiba slashed the prices of the HD DVD players in January by as much as 50 percent in the U.S. and Europe.

However, the Blu-Ray players still topped out the HD DVD players by more than two to one. According to analysts, nearly 80 percent of high-definition software sales were for the Blu-Ray format in January. Sony’s PS3 installed base of 10 million units worldwide is considered as one of the reasons behind Blu-Ray success.

In 2006, Sony delayed twice the PS3 launch, because the Blu-Ray drives were not ready, but in the end it looks like Sony has made the right decision.

Despite Toshiba’s latest efforts, the analysts concluded the war is over. Last month in Gartner's Semiconductor DQ Report, the analyst Hiroyuki Shimizu said that Blu-Ray would be the real champion until the end of the year.

The battle between Toshiba’s HD DVD and Sony’s Blu-Ray is raging for about three years and at the core of both formats are blue lasers, which have a shorter wavelength than the red lasers used in current DVD players, allowing discs to store data at the higher densities needed for high-definition movies and television. Blu-Ray discs store information only 0.1 millimeter from the surface while HD-DVD discs store it at 0.6 millimeters.

In the past years, in an attempt to find a solution, Toshiba and Sony have gone through several rounds of negotiation in order to discover and promote a universal format. For various reasons, the negotiations have reached a dead end, with each company going its separate way.

As a solution for the competing formats, the electronics makers such as Samsung and LG have decided to develop hybrid players, able to play the both formats. However, the devices failed to catch on, due to expensive technologies required for playing both formats.

The Blu-Ray breakthrough is a huge win for Sony, because the company is likely to win billions of dollars as commissions from the movie studios.