Blockbuster Bets on Blu-Ray

Movie rental giant Blockbuster picked sides today in the hotly contested battle over high-definition DVDs. Starting in July, Blockbuster will buy all of its new high-def DVDs in Sony's Blu-ray format, a damaging blow to rival Toshiba's HD DVD, which the rental company had stocked jointly until now.

The decision marks an early victory for Sony in the format war that's been scaring consumers away from the high-def DVD market. But Blockbuster says it's merely heeding demand: Blu-ray rentals at the chain were 70% higher than HD DVD's, thanks to Sony's exclusive contracts with several major studios, and the company's secret weapon—a built-in Blu-ray player that comes standard in each new Playstation 3. (More DVD stories.)