Although HD DVD appears to be in dire straits, the format battle between it and Blu-ray has had at least one positive ramification: pricing on players has fallen at a rapid rate, and sales are eclipsing those seen in the early years of DVD.

The market seems to have spoken on HD DVD. In the week after Warner's defection to the Blu-ray camp, weekly HD DVD player sales according to NDP sank from a healthy 14,558 the week previous to a paltry 1,758. Blu-ray saw a reverse trend, climbing from 15,257 to 21,770. Blu-ray captured approximately 93 percent of the market that week.

Paul Erickson, DisplaySearch director of DVD and HD Market Research, told Video Business that the competition has resulted in price drops coming at previously unseen speeds. The result has been an explosion of sales that puts the next-gen players ahead of DVD, if you compare their first couple of years. "There is a much larger spike at the end of the year for next-generation DVD due to strong performances by both formats for November and December, as well as heavy competition-driven promotions for both Black Friday and the December holiday season," Erickson said.

Be that as it may, $300 for a Blu-ray player is still too rich for many. Depending on which models you focus on, Blu-ray players dropped an average of 40 percent in price over the year. Now that Blu-ray has a commanding lead among the studios, you might think that a decline in player pricing will slow. The Blu-ray Disc Association has every reason to keep the momentum going, however, even if HD DVD were vanquished tomorrow. Blu-ray still need to compete with both standard DVD and download services.

Indeed, Blu-ray may have lost a challenger only to gain one, two, or three. Apple's new movie rental service is a challenger, if you ask Steve Jobs. The turtlenecked Jobs told CNBC after Macworld that Blu-ray may have beaten HD DVD, but that it will lose the HD content war to download services like that offered by Apple. Truth be told, it's a game plenty of players are in, including Amazon, Netflix, and BitTorrent. Jobs may be right: all of these companies have a real shot at making Blu-ray sweat.

Still, we won't predict the demise of Blu-ray on account of download services. While there will be healthy competition, download speeds, storage, and the much-discussed PC-to-TV problem will conspire against a total victory for downloads anytime soon.