Microsoft is teaming up with some major Hollywood studios and the main promoter of HD DVD, Toshiba, to form the Advanced Interactivity Consortium (AIC), intended to accelerate the adoption of advanced interactivity and interoperability across HD DVD products.

Although the consortium has its roots in the work Microsoft has done with HDi, the firm’s implementation of the interactivity layer in HD DVD, the software giant said AIC will be open to all industry players interested in bringing a broader set of experiences to consumers from advanced in-movie navigation, bookmarking and picture-in-picture, to Web-enabled communities, content downloads and e-commerce stores.

The consortium includes movie studios Paramount Pictures, Universal Studios and Warner Bros. as well as DreamWorks Animation. The announcement fuels an already heated battle between HD DVD and Blu-ray as the two competing high-definition DVD formats get ready for the holiday season.