A year later, Microsoft has plenty of supply and the other guys are constrained. And, according to early information, Xbox 360 sales are ramping sharply, indicating that it will be the clear winner in terms of installed systems. This fact is critical as game developers are not religious about systems. Generally, they prioritize their efforts based on the number of potential customers in a given market. If Microsoft has several millions more of these potential users, they will get the cream of the games coming out from independent developers. And it is the games that make or break a system.

With the Xbox 360 moving so strongly into the market and the top accessory this year being the $200 HD-DVD drive the battle may be over by year end. There is every chance that there may be as many as ten times more HD DVD players than Blu-ray players in the market by the end of the year - even if you don't factor in that HP, the current leader in PC sales, started shipping desktop computers with a $100 HD DVD option. This, coupled with a much lower overall cost for the stand alone players as well as better support for legacy TVs and dual mode disks (that have both legacy DVD and HD-DVD content on a single disk), suggests that HD-DVD is now the format to beat.

HD-DVD wins because of the Xbox 360 - which is ironic, given Blu-ray should have won because of the Playstation 3. Instead, Blu-ray has delayed the Playstation 3 to a point where Sony may have to wait until the Playstation 4 to recover.