After an announcement from  Wal-Mart that it would be dumping the HD DVD format for the more widely used (as speculated) Blu-ray, reports began circulating that Toshiba has raised the white flag on the issue. Reports say that the company would soon announce to the public that it will stop production of the HD DVD format: The Nikkei Net News and NHK Japan Broadcasting Corporation said yesterday that Toshiba Corporation will announce an exit from the market as early as today and that production will end by March of this year.

Microsoft will have to wait for the official word from HD DVD manufacturer Toshiba Corporation before it decides on the next move for the HD DVD player add-on of the Xbox 360 (shown below).

In an interview with BBC, a Toshiba Corporation spokesperson said, “Toshiba has not made any announcement or decision. We are currently assessing our business strategies, but nothing has been decided at the moment.”

Microsoft just issued a statement that it is not concerned with these reports: “We do not believe the recent reports about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace. As we’ve long stated, we believe it is games that sell consoles, and Xbox 360 continues to have the largest next-gen games library with the most exclusives and best selling games in the industry.”

As earlier reported, Wal-Mart has joined the ranks of retailers Blockbuster, Woolworths, Best Buy and Netflix, in their exclusive deals with Sony and the Blu-ray format.