The BluRay disc format has made up for HD-DVDs early sales lead, exceeding the number of HD-DVD discs sold last month for the first time. Of course, as always, the stastistics are maddeningly short on real detail, as they don't announce how many discs in each format were sold. Discs sold in the HD-DVD format still have a lifetime lead, however, and the sales leader in the overall market for HD DVDs ("Batman Begins") is a movie that is still exclusive to the HD-DVD format.
Most analysts credit the PS3 for the surge, placing as it does a BluRay player in the hands of users through the "trojan horse" of a PS3 gaming console. That, however, doesn't speak to the success of the PS3 (which is hardly flying off shelves, unlike the Wii) so much as the relative lack of success thus far for either next-generation DVD formats. It doesn't take much of a surge to dramatically change the balance on either side.
Universal, a studio that strongly backs the HD-DVD format, has also noted that there is currently a 5:1 hardware ratio in favor of BluRay on account of the PS3 (which shows just how poorly either format has thus far fared). One would expect that the sales lead for BluRay would be higher on account of it. The fact it's not may indicate that a lot of people aren't using the BluRay player for anything but to play PS3 games, unlike HD-DVD users, who purchased dedicated players to watch movies. It remains to be seen if that continues to be the case.
I expect Sony executives hope that surging BluRay sales will help drive more sales of the PS3. The problem with that theory, however, is that the gaming market has shown strong sensitivity to price. Last month, the top-selling game consoles were the Nintendo Wii (number one) and Sony's aging PS2 platform (number 2, by a hair over the XBOX 360). Granted, there are features which are unique to each console that help sales, such as Nintendo's innovative controller and the PS2's huge library of games. On the other hand, they also just so happen to be the lowest cost consoles on the market (one of them a "next generation" console), and I don't think that is coincidental, particularly when one notes the strong sales of handheld game machines.
Nintendo's Wii is already low in cost, and as they didn't push the technology envelope as much as its competitors, going cheaper shouldn't be too difficult. XBOX 360 is already making a slim profit on each console sold, so they have price flexibility should they decide they need it. Sony has less pricing room to maneuver, though now that the initial blue diode shortages have passed the PS3 launch gauntlet, they at least won't be losing $250-$300 per console sold anymore.
Sony is planning to harness the newfound wind behind the BluRay format to pursue the other half of their home media strategy, however, which is to make BluRay the de facto standard for next generation DVDs. The company will release a sub-$600 BluRay player this summer, helping to reduce the price gap in dedicated DVD players vis a vis HD-DVD. Many people might use a cheap player integrated into a game console, at least initially (I have used the DVD player in my XBOX). My personal experience, however, is that over time, I gravitate more to my dedicated playback device (which is a 5-DVD changer) because the cheap integrated option starts to feel like I'm riding down the highway on a "Big Wheel."
Of course, manufacturers of dedicated HD-DVD players, which are already cheaper, won't stand still, and they are likely to start actively working to bring down prices even more. Things, however, have just gotten very competition in the HD DVD space. It isn't going to reassure prospective buyers or studios who are sick of the battle, but neither format appears to be throwing in the towel anytime soon.