A source inside Toshiba has revealed that the company is preparing to drop HD-DVD and that the announcement could come next week.

Of course you have to realise that with all the news just now about the big companies dropping HD-DVD from their shelves and going Blu-ray only, it wouldn't be such a big stretch to say something along these lines.

However the story comes from Reuters, through James on Filmstalker Readers, says that an inside source from Toshiba has revealed the news, and no one from the press offices can be contacted - which isn't too strange since it is a weekend, so don't read too much into that bit.

"We have entered the final stage of planning to make our exit from the next generation DVD business..."

The unnamed source went onto say that they were preparing the final stages of pulling out of promoting HD-DVD and getting on the Blu-ray bandwagon.

They also talked about what Toshiba had learned from the battle, although I'm not sure that they have learned anything if they think it was just this that was at fault:

"Marketing was a weak point for Toshiba. We learned a lot from HD DVD. Strengthening marketing will continue to be an issue for us going forward..."

Let's face some reality here, the Playstation was a major winner for the Blu-ray camp, an upgradable player included as part of the next generation of game console sales and in the most popular console.

HD-DVD really needed Microsoft behind them much better than they did, building in an HD-DVD player from the start, and not doing the usual Microsoft thing of trying to charge for every additional item.

It's not too much of a stretch to believe that this is true, especially with Netflix, Best Buy, Woolworths and Wal-Mart dropping HD-DVD, and that there really could be an announcement next week. It's pretty clear to the consumer, even those who don't have Blu-ray or HD-DVD that the format is on its last legs.

In fact a friend who has purchased HD-DVD is actually looking forward to the announcement as it means a glut of cheap films on the market for his format.

He did point out something very interesting though, this would mean no competition for Blu-ray sales, so is this an end to the low prices and sales that we're seeing at the moment? Perhaps, but there's still the DVD audience to win over onto the new format.