With the recent demise of HD DVD and all things that surround it, this news from Microsoft comes as no real surprise, they have officially discontinued the Xbox 360 HD DVD player. Current owners need not worry though, because although discontinued the support and warranty will remain in effect.
Actually the only real surprise here is that it took Microsoft this long to make it official. A nice follow up would have been the announcement of a Blu-ray player add-on, but that still has not been mentioned. It would make sense though.