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HappySqurriel said:

It wouldn't surprise me if this was true ...

HD-DVD was the favoured format for stand alone players because the player was dramatically less expensive, the movies were less expensive, and the movies lacked "Features" (like unskipable ads) that annoyed potential buyers. Blu-Ray won becase the adpotion rate of a new videogame system is much faster than a new movie format, and (even though gamers buy less movies than movie collectors) the vast number of gamers who bought a couple of movies to play in their PS3 pushed Blu-Ray over the top.

The side effect of HD-DVD losing was that the player prices were slashed (often below the cost of a upscaling DVD player) and movie prices were slashed (often below the DVD version) resulting in HDDVD being a great bargain if you were willing to acept that you'd have to replace your movies in a couple of years (or live without them); and in some cases movie producers have offered trade-ins for Blu-Ray versions of the movie, and some people have picked up movies like Batman Begins or Transformers for $2 on HD-DVD and converted them to Blu-Ray for $5 a piece.

 

Ultimately, the adoption of Blu-Ray is following the same trend that the adoption of most things HD has gone ...

People assumed it would be a smashing success out of the gate, and then they assume that it is only 12 months away from the mainstream desperately wanting it, but most people were satisfied enough with what they had and will wait intil they're "Forced" to upgrade or until there is no benefit for sticking with the technology they have.

Dual format releases always MSRP'd for the same price.  The difference in manufacturing costs were neglible to the consumer (~$1 per disc), and due to economies of scale, BD-Rom manufacturing costs were constantly falling, primarily due to the mass production of ps3 games (MGS4 alone outsold all HD movies sold on either format combined prior to its release).

Also, while the ps3 gave Blu-Ray a nice advantage, Blu-Ray's primary advantage came from its support throughout the industry.  Ultimately, it was Toshiba vs Sony, Matsushita, Samsung, and Pioneer, and Universal vs. Sony Pictures, Disney, Lionsgate, and Fox, with LG, Warner, and Paramount being dual-format. It was basically Toshiba against the world, and they couldn't win.  They did their best to hold off the BDA by paying Paramount to go HD DVD exclusive in late 2007, but the BDA bit back by paying off Warner in early 2008.

And people knew that HD DVD was unlikley to win, which is why Blu-Ray standalone players were outselling their HD DVD counterparts numerous times throughout 2007.  I can't find any articles stating that Blu-Ray players were leading over the 2007 holiday season (though they were, iirc), but I do have this article which shows that Blu-Ray standalone players were outpacing HD DVD standalone players in both August and September of 2007:

http://www.afterdawn.com/news/archive/11427.cfm