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Blu-ray Disc (BD) High Definition Format
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Blu-ray is a next-generation format for home viewing of movies.
Sony created Blu-ray (also incorrectly shown as "bluray" on sites on blogs) to provide content for High Definition Televisions and projectors, Toshiba created HD-DVD as it's competitor and they roughly have the same capabilities (although it looks like Toshiba is about to throw in the towel and drop HD-DVD)
Blu-ray is a successor to DVD with far improved sound and video playback capabilities when used with compatible High Definition Televisions (at least HD-Ready but used to best effect with Full HD Televisions and Projectors). However, if you don't have a High Definition Television then we don't believe that you'll get many (if any) benefits
Blu-ray was created because DVD looks great on standard Televisions but doesn't look as good on large TV screens (we'd define these as over 32" in screen size) nor High Definition Television screens (see our High Definition Guide for more information).
As Blu-ray looks like it's won the battle for the next-generation High Definition Format of choice it's an excellent buy for those people who want the best quality then can get, and with prices for players (including the Sony Playstation 3 which has Blu-ray built in) dropping rapidly and the prices of disks starting to become reasonable now is probably a good time to start moving to Blu-ray
Blu-ray does have one issue though: like DVD before it it has a Region Coding scheme that prevents use of encoded in discs in different areas. See our Blu-ray guide to Region Coding for more information.