"Microsoft is to offer Xbox enthusiasts a separate player this year that can handle movie discs in HD-DVD, a rival technology to Blu-ray.

For the last three years, consumer electronics makers, computer companies and Hollywood studios have been choosing sides in the battle over the dominant format for the coming high-definition DVD's - Blu-ray vs. HD-DVD.

New York Times technology reviewer David Pogue is at the 2006 Consumer Electronics Show, posting blog entries and daily video updates.
Yet after all the jockeying by these companies, it may be the relatively low-priced video game consoles that tip the balance toward one format - or prolong the stalemate for several more years. That's because the new game machines from Sony and Microsoft will play high-definition DVD's and may spur discs sales far faster than stand-alone players.

Sony said in 2004 that its PlayStation 3, due out this spring, would play Blu-ray discs. Not to be outdone, Microsoft, at the International Consumer Electronics Show in Las Vegas last week, said that it would make an external drive to play HD-DVD discs on its Xbox 360, which went on sale in November.

Both the Blu-ray group, led by Sony, Panasonic, Dell and most of the big movie studios, and the HD-DVD camp, which includes Toshiba, Microsoft, Intel and three studios, are starting to release stand-alone players that cost as much as $1,800. But Sony and Microsoft are expected to sell millions of cheaper game machines well ahead of sales of stand-alone DVD players.

The view among industry analysts has been that the HD-DVD group would ultimately lose to the Blu-ray group, which includes more electronics manufacturers, more studios and Sony's game machine.

But if enough Xbox 360 users started watching HD-DVD movies on those machines, Disney, Fox and other studios that have committed to making only Blu-ray discs might be persuaded to make movies in the HD-DVD format, too. This shift could delay any resolution to the format showdown.

"The momentum is behind Blu-ray, but there's no way to write off Microsoft" and the HD-DVD camp, said Joe Wilcox, a consumer electronics analyst at Jupiter Research. "They have the potential to swing the momentum back the other way, and that could delay a single standard."

Perhaps unintentionally, the movie studios, which want one standard, may have hardened the standoff. In October, Warner and Paramount, two companies that had exclusively supported HD-DVD, decided to make DVD's in the Blu-ray format as well.

This gave the Blu-ray group an edge, with commitments from nearly every studio. On the other side, just one major studio - Universal - said it would provide movies in the HD-DVD format only. Blu-ray's newfound advantage prompted Microsoft to beef up the Xbox 360 so that it could play HD-DVD movies. Microsoft did not want PlayStation to have an advantage, according to an executive who has followed the rivalry.

"The movie studios' strategy of trying to unify the format around Blu-ray as the de facto standard backfired," said Warren Lieberfarb, who was a leading Hollywood advocate of DVD in the early 90's and is an adviser to the digital media division of Toshiba." [more]