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HD DVD Vs. Blu-ray: Handicapping The Holiday Sales Race

Monday, 10 Dec 2007 | 2:42 PM ET
Toshiba HD DVD
Toshiba HD DVD

Come tomorrow, we get the next salvo fired in the HD DVD vs. Blu-ray saga when Universal Studios Home Entertainment lets loose the last leg of the Jason Bourne trilogy, "The Bourne Ultimatum" on HD DVD. We'll also get the new boxed Jason Bourne Collection.

Now, before you unleash your wrath on me, yes, Universal Studios is the other half of NBCUniversal , so full disclosure here. But the fact that NBC and Universal and are partners doesn't color my handicapping of the ongoing format war that has consumers caught in the middle. This holiday shopping season could end up being the single most important battle this war and determine whether Microsoft, Intel and Toshiba or Sony, Disney and 170 other companies come out on top.

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Blu-ray is seeing sales surge thanks to Sony's late-in-the-game PlaySstation 3 price cuts. And the HD DVD folks got their own, price-cut shot in the arm when Microsoft cut the price of its add-on HD DVD player for Xbox by 30 percent.

The latest numbers I saw: 2.7 million Blu-ray players versus the estimated 700,000 HD DVD players, despite HD DVD being so much more inexpensive. Another factoid I saw: 74 percent of all Blu-ray players were sold inside Sony's PlayStation 3, or about 2 million units. Of course, the Blu-ray people will chime in that a healthy chunk of the HD DVD sales success comes from the add-on players people bought for their Xbox 360s.

Still, when you compare standalone player purchases, it seems that the race is essentially neck-and-neck. Video Business just reported that HD DVD's installed base surpassed 750,000, thanks in part to that recent Wal-Mart "giveaway" of $99 Toshiba players.

I say neck-and-neck because I haven't seen any hard evidence that consumers are buying PS3's BECAUSE there's also a Blu-ray player inside. The PS3 relationship continues to be a boon for the Blu-ray format, but what's amazing is how close HD DVD continues to keep this race. Even as both sides continue to claim remarkable victories, on both player AND disc sales.

Yet, if disc sales are any indication, Blu-ray is still enjoying a commanding lead: Nielsen/VideoScan says during Black Friday, Blu-ray disc titles made up 72.6 percent of all high-def disc purchases. About 27.4 percent for HD DVD titles.

All of this offers fodder for both sides of this debate, but one thing cannot be ignored, and that's momentum. And HD DVD owns it despite those disc sales. Earlier this year, HD DVD players surpassed 100,000 units sold. Two months later, the number had only grown to 150,000 units.

That 50 percent increase was nothing to sneeze at, but over the past five months, HD DVD unit sales have swelled to over 750,000 units, or a 400 percent increase. Blu-ray might still enjoy a commanding lead in the marketplace, thanks to its ongoing reliance on the Sony PlayStation, but it is very clear that consumers are snapping up HD DVD players at break-neck speed.

The blogs say this is to be expected since HD DVD players are being bought by movie fans; Blu-ray players are acquired by gamers who may also want to watch the occasional movie. Market research will determine the winner this holiday season; and we'll all analyze the data and absorb the spin from both camps. Still, HD DVD continues to capitalize on its little head-start in the marketplace; it offers nice performance, a strong library of titles, and it's the hands-down leader on price.

Take PS3 out of the mix and there isn't even a competition here.

Check out these blogs for Blu-ray and HD DVDenthusiasts.

Questions? Comments? TechCheck@cnbc.com

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