For the home theater enthusiast, the most exciting story of CES 2006 is the debut of the new high-resolution video formats: Blu-Ray and HD-DVD. It’s been tagged as a classic format war, a la VHS vs. BetaMax. In fact, it’s some of the same names from the videotape battle of the early 1980’s. Sony, Pioneer, Philips and others are lining up behind Blu-Ray, while computing giants Microsoft and Toshiba are pushing HD-DVD.

For Sony and Microsoft, this is but one dimension of a bigger battle for your living room. Sony has announced that the upcoming PlayStation3 console will contain a Blu-Ray drive, and Microsoft has plans to release a HD-DVD drive upgrade for their just released X-Box 360. This all makes for quite an exciting, albeit frustrating time for home entertainment enthusiasts.

Are Consumers Ready for Another Format?

For hard-core enthusiasts the answer is most definitely YES. Home theater geeks know that today’s DVDs don’t take full advantage of our spanking new HDTVs, and you can bet that drives them crazy. Current generation DVDs are only capable of 480p resolution, well below HDTV’s capability. Enthusiasts just cannot wait to get a videodisc player that can feed our spiffy new HDTV a full resolution 1080p signal.

For the average consumer, however, who is not so obsessed with their home theater and not so ready to shell out more money for a new player and another copy of the Star Wars trilogy, enthusiasm might not be so great. Current DVD’s look great on HDTV, and it might be difficult convincing them that there is something better that they have to buy.

Of course, that’s assuming that the average consumer actually owns an HDTV. Conversion to HDTV is another impediment. Prices for HDTV’s are coming down and more and more buyers are migrating to High Definition, but they are still by no means ubiquitous. Consumers are certainly not going to care about either format until they own a television that can actually support it.

Make no mistake, the change is inevitable. Regardless of when consumers fully migrate to HDTV, regardless of whether they actually see a difference between current DVD's and the next generation formats, it will be here. The great thing about this transition, is that it should be rather seemless to the consumer. Since current generation DVDs and both of the new DVD types will all be the same size disc, people will be able to upgrade at their leisure. At a certain point, every DVD player you find in the store will all support the next generation format, and they will also be able to play your older DVDs. Your old collection will not be obsolete like your VHS tapes.

And the Winner Is..?

Which format will come out on top? Sony has a history of losing out on format wars. They have a tendency to develop a solid product, but shoot themselves in the foot when it comes to marketing, licensing, and bullying fellow manufacturers. Will they do it again? We don’t need a Magic Eight Ball to see that in the case of Blu-Ray all signs point to No.

Blu-Ray currently holds several advantages. First, it is a technically superior product. It’s capable of storing many more gigabytes of data per disc than HD-DVD – 25-50GB (single-dual layer) for Blu-Ray compared to 15-30GB (single-dual layer) for HD-DVD. Both camps have higher capacity discs in development, but that’s one initial advantage for Blu-Ray. Blu-Ray also supports 1080p resolution whereas initial HD-DVD players will not. This may change, but from the jump this is another major advantage for Blu-Ray.

Second, Blu-Ray also appears to have the critical mass of support from fellow electronics manufacturers and movie companies. Pioneer, Sharp, Philips, Samsung and others are all jumping on the Blu-Ray bandwagon. Microsoft, Toshiba and Panasonic are supporting HD-DVD.

What Should I Do?

Since neither format has any players for sale, your only option is to wait. But even after they are both out, it might be a good idea to wait a little longer. Introductory players from both camps will undoubtedly be expensive, and laden with bugs. Titles will be limited, and if you checked out our CES photos, you’ll see that early players are ridiculously large, resembling VCRs from the early 80’s. Not only that, but technology will improve quickly once the first players are out. Reputable manufacturer Denon has stated that they are going to wait for a winner or build a cost effective universal player. In the meantime, hold tight, and don’t go out and buy an expensive new conventional DVD player.