While HD DVD is currently dominating the set-top player market, the format has steadily fallen behind Blu-ray in regards to movie sales. According to a report by Home Media Research, Blu-ray movies outsold HD DVD by 2-to-1 in the U.S. during the first half of 2007.
Blu-ray high-definition movie discs outsold films on the rival HD-DVD format by 2-to-1 in the United States in the first half of 2007, Home Media Research said on Tuesday.

The division of Home Media Magazine said total sales of Blu-ray discs, using a Sony Corp-backed technology, totaled 1.6 million units from January 1 through July 1, compared with 795,000 HD-DVD discs sold in that period.
If you look outside the US, the gap is even larger. Media Control GfK International has reported that Blu-ray is currently selling HD DVD by a 3:1 margin. At this point, I don't think price cuts or promotions like free movies are going to save the format. If Toshiba, Microsoft and Universal can't pull off a win this holiday season, they might as well pack it up and go home.