Well, its confirmed now.  Reuters is reporting that Toshiba is, in fact, dropping the HD-DVD format entirely, writing off billions of yen (and millions of dollars) in R&D and production costs.

While this will have ramifications in all kinds of areas for months to come (everyone benefits from a single standard, what will happen to all of those HD-DVD units that are unsold, the legality of pulling out with respect to Toshiba’s HD-DVD partners, and so on, yackity yack), I’m particularly curious as to how Microsoft will handle this particular bit of news, as its Xbox 360 currently only supports the HD-DVD format (if you wanted to play movies, and had that extra bit of hardware).  There have been rumours that Blu-Ray support might come in the future; I suppose that future’s going to come a fair bit quicker with Toshiba’s exit from the High Definition wars.