Videotape war VS Next Gen war

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I was looking through Wikipedia and I came across this information. I'm sure some of you have read this but I wanted to highlight a few things.

1) The adult industry myth. According to Forbes, the adult industry had very little impact on the adoption of a long term videotape format. The bit about Sony banning adult content on Betamax is also a myth.

According to Forbes.com, adult video income is approximately $1 billion. "The industry is tiny next to broadcast television ($32.3 billion in 1999), cable television ($45.5 billion), the newspaper business ($27.5 billion), Hollywood ($31 billion), even to professional and educational publishing ($14.8 billion). When one really examines the numbers, the porn industry — while a subject of fascination — is every bit as marginal as it seems at first glance." [2]

2) Betamax was almost 100% in the lead then sales dropped dramatically to 25%.

Although Betamax initially owned 100% of the market in 1975, the perceived value of longer recording times eventually tipped the balance in favor of VHS. By 1981, U.S. Betamax's sales had sunk to only 25% of all sales.

3) It seems that consumers wanted longer recording times for a cheaper price. Picture/Audio Quality was not one of the reasons the majority of consumers based their decision on.

From the consumer perspective, buying a single 8-hour VHS tape for $5 is cheaper than buying two 4-hour Betamax tapes for $10.

What Sony didn't take into account was what the consumers wanted. Sony believed that having better quality recordings was the key to success, whereas it soon became clear that consumer desire was focused more intently on recording time and compatibility for easy transfer of information (Besen, 1994).

The question is how is this format war different? Home computers, consumer electronics, etc., didn't use videotapes to store information. These next generation discs will ultimately (I assume this is the intent) replace DVD's as a video medium and storage medium.

It is tough for Blu-ray to compete in a mass market where the price to quantity ratio favors cheap electronics that are "good enough". What I would like to see is a dirt cheap 1080i Blu-ray player with "good enough" picture quality and sound. Microsoft capitalizes on this fact and realizes if they can get enough decent quality HD DVD players into the market, it will be no contest. With enough money pushing Toshiba, they can take on the market.

Most people are waiting for a format to win since they probably remember the format war of the 1980's (the first of its kind). Will quality define this format war? What is the main factor in this war?

(Edit for clarity; changed "good" to "it's not such a bad thing". figured WB going Blu was obviously better)
It's not such a bad thing if WB holds out on declaring exclusivity. It may buy BDA the time it needs to lower prices and cut manufacturing costs so that when Toshiba/Microsoft no longer can drop prices, Blu-ray will be side by side with Blu-ray having the clear advantage at that point. Maybe that has already begun. Maybe they can but they aren't for some reason. Maybe BDA is timing price drops with WB.

http://en.wikipedia.org/wiki/Videotape_format_war