Microsoft has officially removed support for formatting floppies to 720K since Windows XP. For majority of people floppies (especially 720K ones) have long been a thing of the past. However, if you do find yourself in a situation where you need a floppy to be formatted to 720K, you can still do it through command line.
Open command line (Start -> Run -> cmd), insert a floppy, and enter the following in command line:
FORMAT A: /T:80 /N:9
This will format your floppy to 720K. Couple of things to be aware – first, in order to be able to format floppy disk to 720K, you need to cover the hole in lower right corner (you can use masking tape), and second, if you are using a USB floppy drive, this might not work due to most USB floppy drives not supporting reading / writing 720K format.