[gamespot]Microsoft: 360 HD-DVD drive will be cheapest

http://news.bbc.co.uk/2/hi/technology/4782953.stm
'Stalemate' for high-def DVD war
Blu-ray
The Blu-ray format is backed by Sony
The battle between two rival and incompatible high-definition DVD formats will end in stalemate, a research firm has predicted.

Blu-ray and HD-DVD are the two new formats being rolled out globally over the course of the next 12 months.

But Screen Digest predicts neither format will gain the upper hand and that the rivalry will do damage to the market for high-def DVDs overall.

Sony is the principal supporter of Blu-ray while Toshiba backs HD-DVD.

Ben Keen, Screen Digest chief analyst said: "We believe that the most likely outcome is... that the two formats will coexist until they give way to affordable dual-format solutions.

'Dampen appetite'

"Overall though, the net result of the format war and the publicity it has generated will be to dampen consumer appetite for the whole high definition disc category."

Screen Digest forecast that only $11bn (£6.4bn) of the total $39bn expected to be spent on video discs by 2010 in the US, Europe and Japan will be generated by the competing high-definition formats.

Xbox 360
Microsoft is to release an HD-DVD player for the Xbox 360

The DVD format exploded into a multi-billion-dollar industry in the 1990s in large part because the universal format delivered a more convenient way to own movies than its predecessor, the VHS videotape.

Consumers had also tired of the low quality of much of VHS and there was a desire for a better format.

"This time both formats support similar features," said Graham Sharpless, who wrote the report.

The new formats are being introduced just as DVD sales level off but some observers question whether the appetite for a next-generation format is yet present.

All of the Hollywood studios, except Universal, have said they will release movies on Blu-ray, with the first players and titles having launched earlier this year.

Major studios

Only three of the major studios have said they will release movies in HD-DVD formats.

Microsoft has thrown its weight behind HD-DVD while Sony is incorporating Blu-ray players into its PlayStation 3 console.

At the moment Blu-ray players cost twice as much as HD-DVD players - at about $1,000 (£600) versus $500 (£300).

There have been reports of Blu-ray discs played on Sony and Samsung machines being noticeably lower in video quality than HD-DVD rivals.

Samsung reportedly blamed a faulty chip for problems with early models, which have since been rectified.

Screen Digest predicts that few households will opt to replace their existing DVD libraries.

The research firm predicts that market value will come from the premium prices charged for the new formats.

This could mean that by 2010 total revenues from DVD sales will be 15 to 20% higher than would have been the case without high definition.