After Toshiba decided to withdraw itself from the war of formats by promising to cease manufacturing of HD DVD equipment, it is widely believed that Blu-ray disc (BD) format has bright future. However, the actual battle for Sony-backed technology is ahead and the main enemy is conventional DVD that is used in hundreds of millions of households.

“Blu-ray disc has passed its first real test by beating HD-DVD. But a much bigger challenge now lies ahead if BD is to become as successful as DVD, and content owners, retailers and manufacturers must now demonstrate that they can work together to promote BD effectively,” said David Mercer, principal analyst at Strategy Analytics.

A major challenge lies ahead if the home video industry is to persuade hundreds of millions of DVD owners that they should switch to a completely new format. DVD players nowadays cost less than $100 and many of the newer devices can offer higher image quality thanks to upscaling techniques.

Another challenge for the Blu-ray disc Association (BDA) is to persuade end-users to actually buy new movies on a physical disc, but not rent or buy them from services like Apple iTunes or Microsoft Xbox Live. Even though high-definition content available online is much lower quality compared to movies on Blu-ray or HD DVD, end-users who see no major difference between DVD and high-def content in general are likely to stick to online services instead of getting rather expensive players and discs.

Strategy Analytics company calls the industry to unite behind “a major promotional campaign to push Blu-ray disc as the preferred optical disc standard for the high-definition age”. But besides promoting Blu-ray technology high-definition TV-sets should be promoted as well. In fact, considering that only a fraction of consumers in Europe or the USA have HDTVs, it is highly unlikely that a high-definition video format may get popular overnight.

Strategy Analytics predicts that cumulative sales of standalone Blu-ray disc players, excluding games consoles, PCs and other devices, will reach more that 100 million units worldwide by 2012, if the consumer electronics industry succeeds in popularization of high-definition video.