I think it is going to be Blu-Ray, all because of one device - the Playstation 3.

When the PS2 came out, it was most peoples first DVD player. In fact, many people bought them as DVD players with a little bit of gaming on the side. The price gap between a standard DVD player and a PS2 was not much back then.

A big fighting point about the PS3 is that it is the only next gen console with high def movie playback. I don't think it will soak the market like the PS2 (its going to be expensive), but it will spread Blu Ray players around in homes. Where there are players, there will be content, and so there will be a market.