Japan's Toshiba Corp. waved the white flag in the home movie war, giving up on its HD DVD format after losing the support of key studios and retailers to the Blu-ray technology backed by Sony Corp.
The decision ends a war between rival consortiums led by Toshiba and Sony vying to set the standard high-definition movies on DVDs, and which has stalled a shift to the new technology in the $24 billion home DVD market.
Toshiba, which had hoped HD DVD would become a growth driver for its consumer electronics business, said it would start reducing shipments of HD DVD players and recorders and aims to close out the business by the end of next month.
"We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded that a swift decision will best help the market develop," Toshiba President and CEO Atsutoshi Nishida said in a statement.
The electronics conglomerate said it would continue to provide service for all owners of HD DVD products, and that it was still calculating how much shutting down the business would impact its earnings.
The Blu-ray win means consumers no longer have to choose between rival incompatible formats and run the risk of being stuck with a 21st century equivalent of Betamax - Sony's videotape technology that lost out to VHS in the 1980s.
Toshiba has agreements with including NBC Universal's Universal Pictures, Viacom Inc's Paramount Pictures and DreamWorks Animation SKG Inc, which support HD DVD.
The tide turned against HD DVD after the defection last month by Time Warner Inc's Warner Bros studio to Blu-ray. Other US retailers soon followed, such as Wal-Mart Stores Inc, Best Buy Co Inc and online video rental company Netflix Inc.
Blu-ray supporters include News Corp.'s 20th Century Fox, Walt Disney Co. and Lions Gate Entertainment Corp. Sony's PlayStation 3 game console also plays Blu-ray films.
Toshiba, which began sales of HD DVD players in March 2006, has sold one million units of its HD DVD players and recorders worldwide, including sales of drives for Microsoft Corp's XBox 360 game console.
If Toshiba can clear hurdles to design software for Blu-ray, it could use a joint venture with Samsung Electronics Co. Ltd on optical disks to make Blu-ray players, analysts said. Toshiba can also enter into an OEM deal with Blu-ray supporters Sony or Matsushita Electric Industrial Co. to procure Blu-ray products.
Shares of Toshiba closed down 0.6 per cent at 824 yen, compared with the benchmark Nikkei average, which rose 0.9 per cent.