TOKYO, JAPAN - JAPAN'S Toshiba is considering abandoning its HD DVD format for high definition DVDs, as it is losing the battle for market dominance against rival Sony's Blu-ray format, an industry source said on Monday.

Toshiba is reviewing its HD DVD business and 'a complete withdrawal is one of the options it is considering,' the source said.

The move came after top US retailer Wal-Mart on Friday drove another nail into the coffin of HD DVDs by announcing it would shift to exclusively selling movies on Blu-ray.

Weekend reports said losses for the company could reach tens of billions of yen (several hundred millions dollars) if it decides on the pullout.

The HD DVD camp also includes Microsoft, Intel, Universal Home Studios, and Paramount Home Entertainment. -- AFP