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Toshiba Corp is planning to give up on its HD DVD format for high definition DVDs, conceding defeat to the competing Blu-Ray technology backed by Sony Corp, a company source said on Saturday.

The move will likely put an end to a battle that has gone on for several years between consortiums led by Toshiba and Sony vying to set the standard for the next-generation DVD and compatible video equipment.

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HD VMD discs, which hold up to 30GB on a single side, are encoded with a maximum bit rate of 40 megabits per second; that's within halfway between HD DVD's 36 mpbs and Blu-ray's 48 mbps. The format uses MPEG-2 and VC1 video formats to encode at 1080p resolution for the time being, and will possibly move to the H.264 format in the future. Levich said the video quality is "at least as good" as that of the other formats. Using a projection system, HD VMD reps showed me clips of "We Were Soldiers" and "Apocalypto." The movies looked very good--not as stunning as I expected, but I'd just arrived from the CEDIA show floor, where every television vendor uses phenomenal, highly doctored content to show off their products.

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Toshiba has submitted a triple-layer, 51GB HD DVD-ROM disc to the standard's overseer in the hope the technology will be adopted as a standard by the end of the year. If approved, it allow the format to exceed the 50GB storage capacity of rival medium Blu-ray Disc. The HD DVD standard currently defines single- and dual-layer discs capable of holding 15GB and 30GB of data, respectively. That's plenty, say the format's supporters, for a movie encoded in 1080p HD resolution and a stack of extras.

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Engineering one-upsmanship aside, combo DVD players will likely be costly, at least initially. Standard Blu-ray players cost $600 or more, and HD DVD players go for $400 or more. The lasers used in Blu-ray players also remain in tight supply. That limitation played a role in Sony's PlayStation 3 shortage as the game consoles--which contain a Blu-ray player--went on sale late last year. A combo player would have duplicative or more specialized parts and thus cost even more. Another factor adding cost is royalties. Manufacturers that build combo players have to pay fees to both the Blu-ray and HD DVD organizations. Although LG has said it will ship its combo player in the first quarter, it won't reveal the price until Sunday, a spokesman said.