When the HD-format wars started almost 3 years ago, it looked like both formats would co-exist for a long time. Each had the backing of major studios as well as computer software and hardware giants: Microsoft in the HDD-corner, Sony in the Blu-corner. The only problem was that as the two formats slugged it out in seemingly endless rounds, the consumer wasn't buying a ringside seat. Due to the confusion and risk about which format to bet your investment on, most people just waited it out. Fast forward 3 years and it looks like Blu-Ray is emerging as the clear winner.
I had predicted this a long time ago, but truth be told, I was biased. My PS3 came with a Blu-Ray drive, so I was the first kid on the block that could play 1080p movies.
A series of recent events seem to indicate that HD-DVD is falling by the waist-side:

• NetFlix dumps HD-DVD
• BestBuy announces they will stop carrying HD-DVD
• Microsoft slashes prices of HD players by 50% in hopes of boosting sales
  
• Wal-Mart says they'll only stock Blu-Ray
• Finally, Toshiba considers halting production of HD-DVD players

TOKYO (AP) — Toshiba may pull the plug on its HD DVD business, the Japanese electronics maker said Monday, in what would signal the almost certain defeat of its next-generation video format to rival Blu-ray technology.

Toshiba Corp. said that no decision has been made but acknowledged it had started a review of its HD DVD business strategy. The company statement was issued after weekend reports from Japanese media, including Kyodo News, that Toshiba is studying a possible withdrawal from HD DVD. -AP News Feb 17, 2008

What led to the 90% market penetration of Blu-Ray players vs. the measly 10-20% of HD-DVD? Could it possibly have been that every PS3 came standard with the ability to play Blu-Ray movies, while Xbox360 required the purchase of an add-on drive?

Now that we have the privilege of hindsight, I need to do some research and see if I can reverse engineer the answer. More soon.