TOKYO, Japan (AP) -- Toshiba said Tuesday it will no longer develop, make or market HD DVD players and recorders, handing a victory to rival Blu-ray disc technology in the format battle for next-generation video.

The company said in a statement that the decision followed a thorough review of its overall strategy.

The move would make Blu-ray -- backed by Sony, Matsushita Electric Industrial, which makes Panasonic brand products, and five major Hollywood movie studios -- the winner in the battle over high-definition DVD formatting that began several years ago.

"We concluded that a swift decision would be best," Toshiba President Atsutoshi Nishida told reporters at the company's offices in Tokyo.

Nishida said decision by Warner Bros. Entertainment to release movie discs only in the Blu-ray format made the move inevitable, although his company had confidence in HD DVD as a technology. Toshiba said shipments of HD DVD machines to retailers will be reduced and will stop by end of March.

Both video formats deliver crisp, clear high-definition pictures and sound, but they are incompatible with each other, and neither plays on older DVD players. HD DVD was touted as being cheaper because it was more similar to previous video technology, while Blu-ray boasted bigger recording capacity. VideoWatch video on the battle of the formats ».

The reasons behind Blu-ray's apparent triumph over HD DVD are complex, analysts said, as marketing, management maneuvers and other factors are believed to have played into the shift to Blu-ray's favor that became more decisive during the critical holiday shopping season.

Recently, the Blu-ray disc format has been gaining market share, especially in Japan. A study on fourth quarter sales last year by market researcher BCN Inc. found that by unit volume, Blu-ray made up 96 percent of Japanese sales.

American movie studios also were increasingly lining up behind the Blu-ray standard. Last month, Warner Brothers Entertainment decided to release movie discs only in the Blu-ray format, joining Sony Pictures, Walt Disney and News Corp.'s Twentieth Century Fox.

That left only Viacom Inc.'s Paramount Pictures and General Electric's Universal Pictures as exclusive supporters of HD DVD. On Friday, Wal-Mart, the largest U.S. retailer, said it will sell only Blu-ray DVDs and hardware.

That announcement came five days after Netflix said it will cease carrying rentals in HD DVD. Several major American retailers have made similar decisions, including Target and Blockbuster.