I came across this rumor and deemed it too far fetched to post. Well, Paramount made it official today. Paramount and Dreamworks are going HD DVD exclusive and dropping support for Blu Ray.

Brad Grey, chairman and C.E.O. of Paramount Pictures stated "I believe HD DVD is not only the affordable high-quality choice for consumers, but also the smart choice for Paramount". This decision means that holiday blockbuster releases Shrek the Third and Transformers will only be released on DVD and HD DVD. Paramount also owns Nickelodeon Movies and MTV Films. The exception is that Spielberg films will still be released on both formats. This is a big victory for HD DVD in a format war where Blu Ray has held the dominant position since the beginning of the year. It also shows that Toshiba, who recently announced a third generation of HD DVD players isn't planning on throwing in the towel anytime soon and is taking steps toward strengthening their position. Universal and Paramount both HD DVD exclusive.

The format war just got more interesting. This just in, the official press release.