It’s probably not a very good time to invest in a home entertainment system. The reason is the upcoming war between the HD-DVD and Blu-Ray format:

No one knows what the outcome of this format war will be – it all depends on which format consumers can get more cheaply, more quickly, with more movies available for it. Blu-Ray is technologically superior, true; however, the VHS and Betamax war shows that the technologically superior product does not always win. Sales of DVD drives and media only really took off after DVD player prices dropped below $300, and with HD-DVD’s lower manufacturing costs, this could prove to be a large benefit. However, Sony claims that within a few months of launch, Blu-Ray media will be priced within 10% of current DVD prices. With the first products set to hit the market by Christmas of this year, 2006 is going to be an interesting year for High Definition.

I don’t believe Blu-Ray will come that close to the price of HD-DVD – at least not within a one-year timeframe. My money is on HD-DVD. Just like the old VHS/Beta war, HD-DVD is good enough for most applications, it is cheaper, and it will be to market first. In any event, within a year, simple DVD will be obsolete.