updated 2/24/2008 5:34:46 PM ET 2008-02-24T22:34:46

Microsoft Corp. said it will stop making HD DVD players for its Xbox 360 video game system after Toshiba Corp. ceded the high-definition video format battle to Sony Corp.'s Blu-ray.

Microsoft said Saturday it would continue to provide standard warranty support for its HD DVD players. Toshiba President Atsutoshi Nishida last week estimated about 300,000 people own the Microsoft video player, sold as a separate $130 add-on for the Xbox 360.

"HD DVD is one of the several ways we offer a high definition experience to consumers and we will continue to give consumers the choice to enjoy digital distribution of high definition movies and TV shows directly to their living room, along with playback of the DVD movies they already own," Blair Westlake, a corporate vice president of Microsoft's media and entertainment group, said in a written statement.

Microsoft was one of HD DVD's main backers, along with Intel Corp. and Japanese electronics maker NEC Corp., and its support for the format was seen as a big win for Toshiba's format.

But support for the HD DVD waned as major movie studios — Sony Pictures, Walt Disney Co., News Corp.'s Twentieth Century Fox and Warner Bros. Entertainment — picked Blu-ray to distribute high-def DVDs. Wal-Mart Stores Inc. struck what seemed to be the final blow just over a week ago when it said it would only sell Blu-ray players and discs.

Microsoft said it is looking at how the HD DVD technology it has developed, such as HDi, which adds interactive features to HD DVDs, and its VC-1 video encoding technology, can be applied to other platforms.

The Redmond-based software maker said the decision to stop selling HD DVD players won't have a material impact on its video game business.

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