Sony's Blu-ray is already gaining serious traction since Toshiba exited the next-gen optical disc format battleground through abandoning HD-DVD development. According to analyst groups cited by Reuters, 3.8 million of the 4.9 million high-def ("next-gen") DVDs sold during the first quarter of 2008 were Blu-ray format. While this further cements Blu-ray as the next-gen media of choice for movies, such figures are still not enough to make up lagging sales of "standard" DVD movies, sales of which may have peaked two years ago.

In other words, declining DVD revenue is keeping the North American home video market down, and Blu-ray sales haven't yet reached the level needed to turn the tide. Analysts feel consumers are still holding out on making the big jump to Blu-ray in general, being plenty comfortable with the current DVD format as it is. Another part of the issue is the prevalence of the PlayStation 3 as the Blu-ray player of choice. This means studios distributing movies on Blu-ray will be largely looking at the PS3 install base for sales and it's still a relatively small one, despite the lower pricing of the console compared to standalone Blu-ray players.

In fact, said analysts believe Blu-ray as a medium will only really start picking up once the standalone Blu-ray players themselves start getting some serious price cuts. It's interesting to see that for all the benefits the PS3 has with built-in Blu-ray capabilities (complete with upgradable firmware via PSN!), analysts feel the general public still regards the console as a "games" machine. Well, that certainly isn't going to make anyone who got a PS3 primarily for Metal Gear Solid 4 and Grand Theft Auto IV flinch!

...since the vast majority of Blu-ray players are in homes because Sony has embedded them into the PlayStation 3 video game consoles, many consumers don't seem to care that they even have a Blu-ray player.

Until stand-alone Blu-ray players -- the cheapest is about $370 -- fall to below $200, Americans en masse won't adopt the new technology, experts predict. [Bernstein Research analyst Michael Nathanson] predicts in a recent 27-page report that that won't happen until the end of 2009.