Mumbai: Japan's Toshiba Corporation has decided to stop developing and marketing HD DVD players and recorders, thereby ending a battle with rival Blu-ray disc technology for next generation video format.

Beginning 2002, Tokyo-based Toshiba was locked in a format war with rival blue-laser optical disc technology for the booming $24 million DVD market.

Toshiba's move would make Sony Corporation, Matsushita Electric Industrial Co, which makes Panasonic brand products, and five major Hollywood movie studios backing the Blu-ray the winners in the battle for high-definition DVD formatting.

"We concluded that a swift decision would be best," Toshiba president and chief executive Atsutoshi Nishida told a press conference.

He said the decision was a difficult one, "but when we thought about the trouble we would cause to consumers and our partners, we decided it was not right for us to keep going with such a small presence."

Toshiba, however, will continue to support existing HD DVD players, he added.

Toshiba did not announce plans to produce its own Blu-ray drives, but it is unlikely that the consumer electronics major will abandon the DVD market.

Toshiba's decision to abandon the HD DVD format was hastened by Warner Bros Entertainment's decision last month to release movie discs only in the Blu-ray format.

"That had tremendous impact," he said. "If we had continued, that would have created problems for consumers, and we simply had no chance to win."

Warner Bros joined Sony Pictures, Walt Disney Co and News Corp's Twentieth Century Fox in the move against HD DVD video format.

Hollywood studios that supported the HD DVD format included Universal Studios, Paramount Pictures and DreamWorks Animation.

An estimated one million customers, including some 600,000 in North America, have already bought HD DVD machines on Toshiba's promise to provide product support for the technology, Nishida said, adding, his company had confidence in HD DVD as a technology.

HD DVD like Blu-ray deliver crisp, clear high-definition pictures and sound, but they are incompatible with each other, and neither plays on older DVD players. But both formats play on high-definition TVs.

HD DVD was relatively cheaper as it was more similar to the earlier video technology, while Blu-ray boasted of higher recording capacity.

Toshiba said shipments of HD DVD machines to retailers will be reduced and will stop by end of March.

Sales in Blu-ray gadgets are now likely to pick up as consumers had held off in investing in the latest recorders and players because they didn`t know which format would emerge dominant.

Toshiba's exit from the HD DVD operations will improve the company's profitability by up to 50 billion yen ($460 million) and lessen the potential damage in losses, according to Goldman Sachs.

Marketing, management manoeuvres and other factors are believed to have helped Blu-ray triumph over HD DVD during the holiday shopping season.

Blu-ray disc format has been gaining market share in Japan as well. A study on fourth quarter sales last year by market researcher BCN Inc found that by unit volume, Blu-ray made up 96 per cent of Japanese sales.

With increasing support from movie studios, retailers also began to stock more Blu-ray products.

Several American stores, including Wal-Mart Stores Inc., the largest US retailer, had already decided to sell only Blu-ray DVDs and that has come as a final blow to the Toshiba format.

(See: Blu-ray wins Wal-Mart; Toshiba bows out from HD DVD)