With confusion reigning over the continued talks between Toshiba and Sony
regarding a unified next generation disc format, Microsoft has lent its support to Toshiba’s HD-DVD technology, with the two companies announcing a formal alliance to develop HD-DVD technology and software together via a Japanese press conference, according to Bloomberg News.
Since Sony is Blu-ray’s most high-profile supporter, Microsoft has long been linked with Toshiba and their HD-DVD format. Toshiba executives had tried to convince Microsoft to use the technology in the Xbox 360, although the continued arguments over a unified format and the early release of the console quickly made this impossible.
Despite this, Toshiba and Microsoft have announced that they will be strengthening their joint development of PCs and other products. In May, the two companies announced a cross-licensing agreement. This allowed the two parties to use each other's patents on computer and digital electronics technologies, paving the way for today’s further strengthening of their business ties.
Officials have now confirmed that the two companies will be working together on the development of HD-DVD players using Microsoft Windows software, a move that Toshiba hopes will help lower its development costs for the next-generation DVD player. "We think the agreement will have practical benefits such as lower costs and shorter development times", Toshiba President Atsutoshi Nishida told a news conference in Tokyo, also attended by Microsoft Chairman Bill Gates.
Despite this move, Gates maintained, in comments at the same press conference, that Microsoft remains neutral in the disc format battle, not explicitly supporting either side. This and other concerns make it unlikely that the Xbox 360 will feature any kind of HD-DVD compatible peripheral in the near future, though the Microsoft Chairman confirmed: "We are looking at whether future versions of Xbox 360 will incorporate an additional capability of an HD DVD player or something else."