Well, I think the two sides are manuvering like a well played game of chess. I wasn't overwhelmed by either sides news coming out of CES. BD made the move of announcing more exclusive titles and preached how content would win. I definately think BD had a better CES in terms of software.
HD-DVD was very thin on content announcement compared to BD, but they announced that several well known brands would be producing HD-DVD players, and that also some cheap import players were in the works. They also announced 51 GB HD-DVD discs, eliminating the "we have 50 GB discs" from BD's bag or tricks. From my understanding of how they did it, I think 17GB layers will soon be standard (there is still some question as to how backwards compatible triple-layer discs will be). So I think HD-DVD one-uped BD on the hardware side.
So the race will come down to which strategy will win, more expensive hardware, but more content. Or will it be cheaper hardware and less content?
Personally, I think if BD does come out on top, it will take longer for people to adopt it, because hardware and software costs more, which means it will take more time to get to the price point where mass amounts of people are buying it. Sony isn't helping matters any by undercutting the prices of all the other participating CE's with the PS3. Any delay in adoption means there is more of a chance of the next better technology will come along, and if people haven't fully embraced BD by then, BD and HD-DVD could both be obsolete formats. With the onset of broadband distribution, I think this threat is very real.
On the other hand, HD-DVD is cheaper, and likely to reach a price point that mass consumers can accept. However, will they keep waiting for studio support before buying into it because BD has more content, or will they buy into it and hope content comes to them.
I personally know that if I were head of a studio, I would choose money now over money later (even if it is just a year later). I think it may take BD at least 1 additional year to get to an acceptance price point, when compared to HD-DVD. Thats a year of potentially higher revenues lost, which means money that you could have had, but let go past. Rarely is that ever a smart business move. I would support both formats unless the BD or HD-DVD associations were giving me enough comps (wainving $4 mil a year in royalties, or advertising, etc.) to cover the amount of sales I would miss out on by not supporting both. This may be easy for the associations to do in the first few years when sales are very low, but comes increasing difficult as sales pickup. If the war drags on into 2008 at remains basically st alemated, I think you will see exclusive studios going neutral (the only exception is Sony, and perhaps Fox, who have a close relationship to Sony) which will only drag the war out even longer.