The biggest hurdle that the PS3 will have to overcome.

[MikeB]

@ NJ5

Now think about the converse situation, a loss for Blu-Ray... What can Sony do then?

Include a PS3 driver for the XBox 360 HD-DVD add-on?

Seriously it's strongly looking like Blu-Ray is in a winning position (leader in North America, despite HD-DVD's headstart, in Japan up to 98% marketshare, in Australia largest DVD distributer not stocking HD-DVD movies, in Europe Blu-Ray has pushed HD-DVD movies off many shelves, for instance our local Media markt, Europe's largest retailer of consumer electronics, has placed the last remaining unsold HD-DVD copies within its larger Blu-Ray section, etc), adoption is growing rapidly, more so than was the case with DVD, and the bulk of the industry is positioned behind the format. But even if Blu-Ray would not win that war, I think Sony would still release the best of its own and MGM's library on Blu-Ray disc.

But with regard to gaming IMO Blu-Ray as a default offers a lot more advantages to a game console as compared to playing movies, the lots of extra storage will be very useful to developers. Even if Blu-Ray failed as a movie format, IMO Blu-Ray is still a better format for PS3 games than HD-DVD because the discs are scratch resistant, one of the issues XBox 360 owners complain about

Technically there aren't that many differeces between what's possible with HD-DVD and Blu-Ray discs, the major difference seems to be that Blu-Ray discs play at a higher bitrate (and a protective layer). In the past HD-DVD mass production was cheaper, but now even that's not the case anymore. As a movie format I would choose Blu-Ray over HD-DVD both from a technical perspective and based on industry support.