From a logistics standpoint, I would say that the "winning" format is the first format to gain the support of all the movie studios. At the moment, the major (and smaller studios) are divided between the two formats, with only Warner and a few smaller studios supporting both formats at the same time.
If you want to be able to watch any HD movie that is released and you don't want to limit yourself to one or the other side's exclusive studio support, then you HAVE to have a dual format player or one of each. Asking for a duel format player for Christmas will certainly allow you to watch any HD movie that is released, regardless of whether it is released on HD-DVD or Blu-ray.
In another sense though, it's entirely possible that BOTH formats will "lose". HD-DVD and Blu-ray are not just competing with eachother, they are also competing with DVD and other forms of movie distribution, like downloads.
We all expect that if one format is able to have ALL the movie studios on its side that its players and discs will begin to sell very well. But there's a chance that even if a single HD disc format emerges with complete studio support that it still won't sell well enough to produce profits.
We have to consider whether or not the mass market is really going to adopt a new disc format. We all expect that the mass market will eventually move in that direction. As more and more people buy HDTVs, we expect they will want HD content in all forms, including disc-based movie media.
But it is still a very uphill battle for HD discs. The catalogue of DVD movies is enormous. And it's not as though the studios are going to stop releasing movies on DVD. Perhaps one day, but I think that is a long LONG time away. There are just so many DVD players in the world and it simply wouldn't make sense to stop releasing movies on DVD. So effectively, I don't think the catalogue of HD movies is ever going to be equal to the DVD catalogue and that is an issue when the mass market has shown over and over that it is more concerned with quantity than quality.
Another issue is cost. DVDs are cheap and they're only getting cheaper. Again, the mass market has shown over and over that so long as the quality is "good enough": price trumps quality. When you play a DVD on a HDTV, it's not as though it's so blurry that you can't make out what's happening. Heck, the very reason a lot of people bought a HDTV was to watch DVDs, not HD content. And a huge number of people out there think that DVDs ARE HD. Tons of people do not realize that DVDs are only SD resolution. And that is because they look a lot clearer than SD television broadcasts and VHS tapes. So HD discs look even clearer, yes. And yes, side-by-side most people can spot the difference. But DVDs still look pretty darn decent on a HDTV. So long as they are significantly cheaper than HD discs, I truly believe that the mass market is very happy with DVD quality already and the only way they'd even consider HD discs is if HD discs were the same price or cheaper than DVDs. Or perhaps a tiny bit more expensive, but the gap would have to be so small that people could shrug it off as inconsequential to their budget.
I'm a movie and a A/V enthusiast. I can see and hear the difference between DVD and HD discs with no problem. I like HD disc movies. But even I can honestly say that if both formats die and we're left with only DVD? I'm not really all that worried about it. Even for me, DVD is "good enough". I LIKE having better. I ENJOY having better. But if DVD were all we had? I'd still be pretty happy and easily be able to still enjoy myself.
Having HD resolution and lossless audio doesn't improve and movie's story or acting. I can easily lose interest in a HD movie if it's a crap movie and I can easily be totally engaged by a DVD movie if it's a fantastic movie! Fantastic movies in HD are awesome, no doubt. But HD alone just isn't really compelling enough for me to really sweat it if it doesn't succeed.
As far as I can tell, the mass market is simply waiting. If they can buy a HD disc player for the same price or just a little bit more than a DVD player AND they can be sure that it will play ALL the HD movies - not just half from the studios that support that player - then I think they'll start taking a look. Even then, the discs themselves are going to have to sell for the same price or maybe just a tiny bit more than DVDs, otherwise, most people will just opt to save the cash and still buy the DVD version.
If all else is equal, people may take a look at the quality of the video and audio and say, "well, it's basically the same price and the HD disc DOES look a little better, so yeah, why not, I'll buy that version". But all else has to be equal! The price of players, the ease of setup and availability. People would already have to have a HDTV in their home for the consideration to even make any sense at all.
Maybe we'll get there, maybe we won't. We also have to consider downloads as well. If it becomes possible to download movies even more quickly and cheaply, then that is going to start biting into the market just like music downloads. Movie studios already claim billions in losses to just that sort of thing, although I personally believe they are grossly exaggerating the numbers. Never-the-less, it's obvious that quality is not the reason for downloads' success. mp3s don't even sound as good as CDs, but you can get them for free - so who cares? Most movies that you download do not look or sound as good as a DVD. But you can get them for free - so who cares? Heck, a lot of movie downloads are just a handicam off a movie screen. They look WAY worse than a DVD and the sound isn't even close. But you can get it for free and get it when the movie is still in theatres, sometimes BEFORE it's in the theatres - so who cares?
For HD to succeed, it has to be cheap, it has to be ubiquitous and people need to already have the equipment in their homes to enjoy it. Thinking that the mass market is going to pay more for higher quality is honestly just silly. Some of us care about quality. some of us care enough to spend considerably more to get it. But we are a tiny minority. If Netflix is any indication, we're about 0.3% of the population.
Neither side of HD-DVD vs. Blu-ray can "win". Not as they are now. One of the two would have to gain total studio support. And even then, it would have a huge uphill battle. I hope it will happen. I like HD movies. I prefer them. But if both go the way of SACD and DVD-Audio? I won't sweat it. I don't have 500+ DVDs because I thought they looked like crap. And heck, DVDs are so easy to copy or buy used for dirt cheap. Other than "event" movies? Where's the real incentive for HD movies to begin with?