Toshiba today announced that it will be discontinuing its HD-DVD business after reviewing its strategy for HD-DVD and taking into account “recent major changes in the market.”

This means that it will not be developing, manufacturing or marketing HD-DVD players and recorders. It will, however, continue to “provide full product support and after-sales service for all owners of Toshiba HD-DVD products.”

Making digital convergence a reality

“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,” said Atsutoshi Nishida, President and CEO of Toshiba Corporation.

“While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality.”

Toshiba will begin reducing their shipments of HD-DVD players and recorders to retail channels and aim to cease the businesses by the end of March 2008. Volume production of HD-DVD disk drives for applications including PCs and games are also set to be ended by the end of March 2008. Notebook PCs with integrated HD-DVD drives within the PC business will be assessed based on demand in the future. It intends to focus on flash memory, hard disk drives, next generation CPUs, visual processing and wireless and encryption technologies.

Toshiba also stated that it will continue to collaborate with and look for future business opportunities with companies who joined to build the HD-DVD market such as Universal Studios, Paramount Pictures, DreamWorks Animation as well as IT giants Microsoft, Intel and HP.

The future of the Xbox 360 HD-DVD player

Microsoft earlier stated that it would announce its plans for the Xbox 360 HD-DVD player after Toshiba revealed its plan. I am sure that you, like me, will stay tuned to see what impact this will have on Microsoft’s Xbox 360 HD-DVD add-on and how this will affect hardware sales in general.

Read more about how the next-gen movie format war between HD-DVD and Blu-ray is heating up in HD DVD/Blu-ray format war heating up…Sony look set to win.