According to this post at Kotaku, UMD format movies have been pulled from the shelves at Target stores this week. The format has struggled for acceptance amid sluggish sales of the only device that can currently play the format, the Sony PSP.
I wouldn’t be surprised if Sony completely removes UMD support from future PSP-related portable devices, and moves to a memory-stick only format in order to reduce the use mechanical parts, device size and production cost.
[UPDATE]: I just came across this story on Gizmodo about Sony offering movies in Memory Stick format..