Microsoft, predictably, has dropped its HD DVD drive for the Xbox 360 in the wake of Toshiba's decision to abandon the hi-def DVD format:

As a result of recent decisions made by Toshiba, Hollywood studios, and retailers, Microsoft plans to withdraw from HD DVD.  Xbox will no longer manufacture new HD DVD players for the Xbox 360, but we will continue to provide standard product and warranty support for all Xbox 360 HD DVD Players in the market.  As we stated earlier, we do not believe this decision will have any material impact on the Xbox 360 platform or our position in the marketplace.  HD DVD is one of the several ways we offer a high definition experience to consumers and we will continue to give consumers the choice to enjoy digital distribution of high definition movies and TV shows directly to their living room, along with playback of the DVD movies they already own.