Microsoft has several times said Xbox 360 would feature a next-generation optical media before the end of its lifespan. Clearly the company won't support Sony's proprietary Blu-ray technology (PSP support in Xbox 360 or not), making Toshiba's HD-DVD the only other reasonable option.

Too bad it seems HD-DVD's losing some steam. The format was supposed to kick off into the retail channels this holiday season as part of a move to stay ahead of Blu-ray, but the Wall Street Journal reports several companies are backing off from their previous pledges of support.

Paramount Pictures was supposed to release more than 20 HD-DVD titles beginning in the fourth quarter, but sources have told the WSJ that isn't happening at all. NBC Universal, originally slated for 16 releases, has now shaved to 'about a dozen,' and Warner Home Video, a primary backer of HD-DVD, is issuing caution and keeping its plans tentative.

One of the primary concerns appears to be over a format war, which would confuse consumers and result in potentially sluggish sales and slower adoption rates to the new formats. "If there is a unification of formats, we would want to work toward that," said Jim Cardwell, president of Warner Home Video.

Supported launch or not, HD-DVD won't be aiming for the mainstream consumer when it arrives; the first players are expected to cost over $1,000. It's a wonder how Microsoft plans to eat the costs for that whenever it lands inside an Xbox 360.