Speculation has been growing over the last few weeks that the next-gen movie format war is nearing the end, with Toshiba-based HD-DVD falling to its Sony-boosted rival, Blu-ray.

Last week, major US retailer Wal-Mart announced that it would be dropping the HD-DVD format. Reports circulated over the weekend that even Toshiba would soon be admitting the battle was over, although the company has yet to announce its surrender publicly.

Wal-Mart joins retailers Blockbuster, Woolworths, Best Buy and Netflix, which all have announced that they would be favoring the Blu-ray format. Blu-ray has also been winning the war on the production side of the industry, as evidenced by January's announcement from Warner Bros. that it would be going Blu-ray exclusive. That leaves only Paramount and Universal holding out in the HD-DVD camp.

Sony is likely to be rejoicing at the news, as the PlayStation 3 is also a Blu-ray disc player, and the format's potentially winning the battle is likely to see sales of the machine leap. Its rival the Xbox 360 plays DVD movies, although a USB addon, costing US$130 in the US and S$299 in Asia, can be bought for watching HD-DVD movies.

However, Microsoft has issued a statement recently saying it is not concerned with reports that HD-DVD will be joining the choir invisible. It said: "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."

Microsoft also said it will be waiting for the official word from manufacturer Toshiba--which has so far not issued confirmation that the format will be discontinued--before it makes a decision on the future of the addon HD-DVD player for the 360.