Microsoft Corp. and Toshiba Corp., both prominent companies in their designated market, today made the decision to further strengthen their ties after few years of previously working together on personal computers and mobile devices.

Earlier this May, both companies announced a cross-licensing agreement in order for them to implement each other’s technologies in their products.

This time, however, Microsoft and Toshiba have partnered to work on Toshiba’s upcoming HD DVD players. Under the partnership, Toshiba would use Microsoft software in its players in hopes of reducing development time and costs.

"We think the agreement will have practical benefits such as lower costs and shorter development times," confirmed Atsutoshi Nishida, President, Toshiba. The press conference in Tokyo, Japan was also attended by Bill Gates, Chairman, Microsoft.

Toshiba would support the HD DVD standard as oppose to Sony supported Blu-Ray. Both standards would immensely increase the amount of space on optical storage discs.

Bill Gates commented that Microsoft has elected not to participate in the format competition, and it does not matter which format gains more ground in the end.