Toshiba has said that it will stop production of HD DVD players and recorders, ending a next-generation DVD format war with rival Blu-ray. The decision was made at a board meeting today and a company statement cited “major changes in the market” as the reason for ending the business. Atsutoshi Nishida, President and CEO of Toshiba said:

“We carefully assessed the long-term impact of continuing the so-called ‘next-generation format war’ and concluded that a swift decision will best help the market develop. While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality.”

Microsoft, whose Xbox 360 has an optional HD DVD drive, told Engadget that the news won’t have “any material impact on the Xbox 360 platform or our position in the marketplace.” This was before the official announcement by Toshiba, so expect a full response soon. What’s certain is that the Xbox 360 will receive some form of Blu-ray upgrade to keep in touch with the PlayStation 3, which already has a built in drive.