The Register writes that Toshiba will apparently put an end to the production of HD-DVD devices, according to Japan's National Broadcaster NHK, which is also a firm backer of 33-megapixel Ultra High Definition Television format.
NHK also reports that the board of Toshiba may also decide to abandon HD-DVD altogether in a move that might cost the company tens of billions of dollars.
Shares of Toshiba rose significantly as the Japanese market learnt about the speculation that could end Toshiba's financial troubles.
The decision comes after two years of intense marketing, technological and financial battles which pitted HD-DVD against Blu-ray, in a war that divided the media and technology sector between backers of both sides.
The turning point came at the beginning of the year when Warner Bros announced its decision to shift sides, moving to the Blu-ray camp, which started a snow-ball effect.
Soon after Netflix and now Wal-mart said that they would stop supporting HD-DVD. Furthermore, Sony's PS3 gaming console which is incidentally a blu-ray console, is gaining in momentum and cheaper blu-ray players have been announced.
This also means that HD-DVD sales will soon plummet to zilch as the second format war, after VHS vs Betamax, finally gets a winner.