Toshiba has officially put an end to the DVD format war and has given up on its HD-DVD business.

The company said in a statement released yesterday that it will no longer develop or manufacture HD-DVD players.

Toshiba's announcement marks a victory for Sony, which will now have the market all to itself with its Blu-ray format.

"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 Toshiba president and chief executive Atsutoshi Nishida.

"While we are disappointed for the company, and more importantly for the consumer, the real mass market opportunity for high-definition content remains untapped.

"Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality."

Toshiba's surrender marks an end to the bitter feud between the backers and supporters of Blu-ray and HD-DVD that dates back more than three years.

The two camps consistently fought to win the support of major studios and retailers, and Sony began dramatically to turn the tide in January when it convinced Warner Bros to abandon HD-DVD.

A wave of defections by retailers last week, including Wal-Mart, Netflix and Best Buy, all but sealed HD-DVD's fate.

Toshiba said that it plans to finish its phase-out of HD-DVD players by the end of March, and to focus efforts on its Flash memory, hard disk drive, processor and wireless businesses.

The company will also continue to produce standard DVD drives and support HD-DVD products already on the market.

However, analysts have warned that Blu-ray's challenge now is to win over a marketplace that has yet to fully embrace high-definition DVDs.

"Blu-ray Disc has passed its first real test by beating HD-DVD," said Strategy Analytics principal analyst David Mercer.

"But a much bigger challenge now lies ahead if Blu-ray is to become as successful as DVD, and content owners, retailers and manufacturers must now demonstrate that they can work together to promote Blu-ray effectively."