The decision comes less than a week after Toshiba, one of the principles behind the HD-DVD format design, announced it was withdrawing from the platform war with Sony's Blu-ray format. Recent moves by major movie studios and retailers, including Warner Bros., Best Buy and Wal-Mart, to exclusive Blu-ray support led most industry observers to conclude that HD-DVD's demise was not far off.
"As a result of recent decisions made by Toshiba, Hollywood studios, and retailers, Microsoft plans to withdraw from HD-DVD," the company said in a statement reported by GamesIndustry. "Xbox will no longer manufacture new HD-DVD players for the Xbox 360, but we will continue to provide standard product and warranty support for all Xbox 360 HD-DVD players in the market." Microsoft added it did not expect the change to adversely affect its position in the console market.
The first consumer-level HD-DVD players were released by Toshiba in Japan in March 2006, beating Blu-ray to market by roughly three months. The format was supported by many industry heavyweights including Universal Studios, Microsoft, Intel and Hewlett Packard, but the inclusion of a Blu-ray player with Sony's PlayStation 3 console as well as a more focused marketing campaign led to more widespread acceptance of the competing format, ultimately resulting in HD-DVD's relatively rapid decline.