The North American HD DVD promotional group has announced that sales of HD DVD hardware and content substantially increased in the second quarter of the year, based on the numbers from different market tracking firms. Meanwhile, according to the promo group, sales of Blu-ray standalone players as well as content dropped in Q2 2007.

Overall HD DVD hardware sales were up 37% from Q1 to Q2 2007, while software sales experienced a 20% increase in growth. During the same timeframe, overall Blu-ray standalone players’ sales saw a 27% decline from Q1 to Q2, and Blu-ray software sales were down 5%. The data released by HD DVD camp is reportedly based on NPD reports, Nielsen Netratings reports and point of sale data from the studios.

According to the promotional group, the success of HD DVD players on the market is mainly a result of price-drop on entry-level Toshiba HD DVD player to $299 in Q2, which expanded the installed base of dedicated HD DVD players to over 180 thousand in the region. 

“The numbers are clear – HD DVD is steadily gaining momentum and market share. With HD DVD CE players now at MSRP prices starting at $299 and with strong marketing campaigns around new HD DVD titles with web-enabled interactive features, we're continuing to raise the bar for the consumer experience,” said said Ken Graffeo, executive vice president of HD strategic marketing for Universal Studios Home Entertainment, and co-president of the HD DVD promotional group.

Toshiba, who is the leader of the HD DVD promo group, does not consider Sony PlayStation 3 game console with built-in Blu-ray drive as a player, otherwise, it would have to admit that sales of Blu-ray playback capable devices have surpassed a million units milestone some time ago. Nevertheless, given that standalone Blu-ray players are not that popular, whereas PS3s are used mainly for gaming, not high-definition movies playback, sales of Blu-ay discs was down 5% quarter-over-quarter in spite of the fact that installed base of Blu-ray hardware is times larger compared to HD DVD.

According to a research report by Consumer Electronics Association, most consumers are basing their purchasing decisions on pricing. Since HD DVD hardware pricing has already dropped from $499 to $299 since the first players were introduced last year, the consumers are likely to continue adopting HD DVD instead of Blu-ray for high-definition movie experience.

“With the total number of titles available for each format differing by only 20-30 titles at this time, the real-world gap in content between the two formats is in actuality not as large as many would perceive. Consumers in the US and Europe continue to show the greatest sensitivity to price, rather than content or branding, in their purchase decision for standalone high-definition players,” said Paul Erickson, market analyst with IMS Research.

HD DVD promo group also said that by holiday season about one thousand of HD DVD titles will be on the market.