Toshiba is "assessing its business strategies" relating to its HD DVD business, amid speculation the electronics giant is on the verge of dumping the next-generation DVD format.
Media reports suggest Toshiba is ready to cut its losses and concede defeat to the Sony-led technology Blu-ray, the alternative to HD DVD, which has support from Wal-Mart and several major Hollywood studios.
The two formats have been competing to become the industry standard, but consumers have been holding back from investing in a new player, unwilling to risk buying the equivalent of Sony's Betamax, which lost out to VHS in the 1980s.
Reuters has reported the company is in the final stages of an exit, citing company sources.
But the Japanese electronics company said in a statement to the London Stock Exchange: "Although Toshiba is currently assessing its business strategies, no decision has been made at this moment."
A decision to pull out of the HD DVD business will be a blow to Microsoft, which has adopted the format for its Xbox, while Sony included a Blu-ray player on its rival console, the Playstation 3.
Toshiba's shares rose 1.49 per cent on the rumours to JPY784 (£3.71), while Sony's shares fell slightly, by 0.30 per cent to JPY4869 (£23.08).
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