Blu-ray misses out on Shrek.
Movie studio Paramount will only published its movies in the HD DVD high definition DVD format.
The Viacom subsidiary also is the the exclusive distributor of Dreamworks Animations movies such as Shrek.
The agreement delivers a blow to the rival Blu-Ray format in what is turning out to be a repeat of the VHS-Betamax standards war of the 80s.
"We believe [HD DVD] is the best format to bring high quality home entertainment to a key segment of our audience - families," DreamWorks Animation chief executive Jeffrey Katzenberg said in a statement.
"We believe the combination of this year's low-priced HD DVD players and the commitment to release a significant number of hit titles in the fall makes HD DVD the best way to view movies at home."
HD DVD is primarily backed by Toshiba and counts Microsoft's Xbox as well as studios including Warner Bros and Universal Studios among its backers.
The Blu-Ray consortium is lead by Sony and counts most of the US' major movie studios among its backers.
Both formats started selling their first players and disks last year. Although volume are very limited for now, Blu-Ray outsold HD DVD by 50 per cent in the first half of this year, according to Home Media Magazine. A total of 3.7m discs were sold over the period.