Warner's backing of Blu-ray format could also make Paramount Studios drop its support of HD DVD, a move that could bring the format war closer to an end.

Paramount, which is owned by Viacom, is understood to have a clause in its contract with the HD-DVD camp that would allow it to switch sides in the event of Warner backing Blu-ray, the Financial Times reported yesterday citing "people familiar with the situation."

Paramount and DreamWorks Animation have been supporting the HD-DVD since last summer, joining Universal Studios as the main backers of the HD DVD format. Paramount and DreamWorks have a close relationship, with Paramount distributing DreamWorks Animation films. None of the companies have officially commented on Warner's decision.

Meanwhile, members of the Blu-ray Disc Association including Warner, Walt Disney Studios and 20th Century Fox Home Entertainment predicted an end to the format war and said they should to focus their energy on educating consumers about high-def media. At the BDA's press conference held late Monday at CES, speakers said that while Blu-ray awareness among consumers was 26% at the end of 2006, it?s now at 80%. They also praised the praised the interactivity options provided by the BD Live technology of the upcoming Blu-ray movie titles.

A official date on a BD Live compatible Blu-ray player is yet to be given and Panasonic was the only company that have announced a specific player so far. It is expected that Playstation 3 will be easily upgraded to support BD Live.

Currently, Blu-ray is supported by 5 Hollywood studios. Warner is behind of approximately the 70% of the Hollywood movie releases.

On the other hand, after last week's shocking news for Toshiba, the Japanese company cannot hide its disappointment but still believes that the format war is not over. Toshiba issued a press release yesterday underlining the advantages of the upcoming 3rd generation HD DVD players, the provided interactive features and the rich audio/video content.

Toshiba?s third generation family starts with the entry level HD-A3 ($299.99) player featuring 1080i output capability. The other two new models, Toshiba?s HD-A30 ($399.99) and HD-A35 ($499.99), output 1080p resolution (1920 x 1080p). Both models are capable of outputting signals at 1080p/24 frames per second so consumers can enjoy movies in their native frame rate. The HD-A30 and HD-A35 models also feature "REGZA Link" (HDMI-CEC), allowing two-way control between the HD DVD player and a TV through an HDMI connection. All Toshiba HD DVD players also feature twin video processors and advanced audio to deliver features such as picture-in-picture video and audio commentary.