Toshiba has denied making any decisions to stop production of its HD-DVD format and remove itself from the high-definition playback battle.
"The media reported that Toshiba will discontinue its HD-DVD business. Toshiba has not made any announcement concerning this. Although Toshiba is currently assessing its business strategies, no decision has been made at this moment," read the statement in full.
Removing the HD-DVD format from sale would concede defeat to Sony-licensed rival format Blu-ray. Blu-ray has been gaining impetus recently, with big names such as Warner Bros. and others announcing their support for it.
Microsoft currently offers an HD-DVD peripheral for use with its Xbox 360. Rumours it would integrate the technology have been rubbished in the past, and many observers - including Hollywood director Michael Bay - feel the format was adopted as a way to promote consumer indecision while it built up its digital distribution service.
Microsoft recently unveiled a fresh deal with Paramount to make the studio's new movie releases, and a selection from its back catalogue, available for download from the Xbox Live Video Store.
The first fruits are expected in around three weeks.