The answer is still unknown, but if you’ve got a big collection of DVDs or Blu-ray discs, you won’t be enjoying them on the Wii U. Speaking to investors, Nintendo President Satoru Iwata confirmed that the new console won’t support movie playback in either format, Kotaku reports. The Wii U will only accept discs in a 25 GB proprietary format.

Nintendo figures that enough people already have DVD or Blu-ray players, so including the capability — and licensing the associated patents — wasn’t worth the extra cost.

This isn’t terribly surprising. The Wii doesn’t play DVDs, and that didn’t stop Nintendo from selling scads of consoles. And besides, the Wii U could still be a multimedia powerhouse without optical discs.

Except, so far, Nintendo hasn’t shown that it wants to be in the movie and TV business. On both the Wii and the Nintendo 3DS, the company’s relationship with streaming video starts and ends with Netflix, at least in the United States. Meanwhile, Microsoft and Sony are engaged in a streaming media arms race. The Xbox 360 has ESPN3 and Last.fm. The Playstation 3 has Vudu, MLB.tv and NHL GameCenter. Both consoles have Netflix, Hulu Plus and their own stores for pay-per-view video.

The strategy seems to be paying off. Microsoft recently said that 40 percent of activity on the Xbox 360 is not game-related, and Sony said the Playstation 3 accounts for 30 percent of all Netflix streaming.

I see game consoles as yet another single-purpose device jeopardized by multi-purpose hardware. So while the Wii U’s lack of Blu-ray and DVD support isn’t a huge problem, Nintendo will still have a lot of catching up to do on the streaming video front if it wants to stay relevant in the next console generation.

While Blu-ray may not be the replacement for DVD that many once hoped for, it is certainly adding strength to the physical video-disc market. This added stability is helping to extend the life of discs, even as digital options gain in popularity.

So is 15 percent penetration good, bad, or indifferent? Well, Blu-Ray was launched in June of 2006, so it’s now a half-decade old. By way of (imprecise) comparison, DVD turned five in 2002–and that year, the CEA reported that DVD players were in 35 percent of U.S. households that year. Sounds like Blu-Ray is off to a far more sluggish start than its predecessor.

Of course, we live in a way different world than we did when DVD arrived. Its advantages over VHS as a movie-watching medium were huge and obvious: far better quality and random access in a much smaller, less fragile package. And DVD faced no competition as a new-and-improved way to watch movies.

Blu-Ray is a better way to watch movies than DVD, but it’s more subtle–the big draw is really, really good quality rather than really good quality. It faces competition galore: a far-flung, overlapping mishmosh of choices including Apple TV, Netflix, Vudu, Amazon Instant Video, TiVo, Roku, Boxee, Google TV, and lots more. You can consume vast quantities of high-quality video without ever getting near an optical disc.

When Blu-Ray was under development early in this century, it was obviously meant to be a DVD replacement: a new box that everyone would buy to replace their old box. That’s not going to happen. Some early-adopter types (like my friend Louis Gray) are just skipping Blu-Ray and moving directly to movies that don’t involve physical media. Extremely late adopters will stick with DVD for now–and Blu-Ray may have come and gone before they’re ready to retire their DVD players.

That leaves everybody who’s neither a bleeding-edge type nor a lollygagger as potential Blu-Ray buyers. And it seems to me that if a lot of them end up buying a DVD player, it won’t be because they’re all that excited over Blu-Ray. They’ll get it because players are now available under a hundred bucks, rendering it a very low-cost upgrade over DVD if you’re buying an optical player at all. They’ll get it because so many Blu-Ray players come with Amazon, Netflix, Vudu, and other streaming services, making a Blu-Ray player one of the most logical ways to connect an HDTV to the Internet. They’ll get it (as I did) because they buy a PlayStation 3. They might get it because they (gulp) buy a 3D-capable TV and need a source of 3D content.

Maybe there’s still a window for Blu-Ray to do okay–not as the next big thing, but because…well, because it’s just there.

Strategy Analytics researcher Peter King told Foxnews.com that even through Sony won the format war against Toshiba and HD DVD more than three years ago, only now has the format been able to equally split the 20 million disc players sold evenly with standard DVD.

It now seems clear that the format war mortally wounded the format, as consumers held off purchases while the two sides duked it out. And Blu-ray’s slow start may also be due to the fact that consumers still don’t see any value in upgrading their players.

Yes Blu-ray offers definite clarity advantages and backwards compatibility. But as King notes, most likely don’t realize this and incorrectly assume that moving to Blu-ray would require upgrading their collection. They may also not spot the difference between an upconverted DVD and a Blu-ray disc.

Could it be that as has critics have repeatedly said, time is running out for Blu-ray? Ever faster Internet connections and a boom in streaming media (with high-definition now coming into vogue) may spell doom for optical discs.

Seventy-seven percent of consumers still watch movies on disc according to NPD, so there still is some hope. I’m more than certain that the percentage is on its way down, so Blu-ray’s window of opportunity is closing, regardless.

So I feel obligated to provide an update: As of yesterday evening, there’s a Blu-ray player in my living room.

To be precise, it’s a PlayStation 3. Rather than buying a box with the principal purpose of watching Blu-ray movies–although I’ll admit I’d recently flirted with that idea–I bought the PS3 because it’s a significant piece of general-purpose consumer electronics. I figured I needed ready access to it so I could write about it…just as I own a Windows PC, a Mac, an iPhone, an iPad, an Android phone, and various other major platforms.

(Another reason I bought the PS3: I recently replaced my scary, bursting-at-the-seams entertainment center–which was so dense with electronic boxes that it was probably a fire hazard–with a roomier one.)

But even though I didn’t buy the PS3 primarily for its Blu-ray capability, I do admit that I’m sort of glad to have the option. The era of 100% digital entertainment is getting off to a slower start than I’d expected: Too much stuff isn’t available in streaming form, or is available only in standard, definition, or lacks the bonus materials that come with shiny-disc versions. Some titles can only be bought when I really want to rent them; others can only be rented when I really want to buy. And nothing works on every single gizmo I own that’s capable of playing movies.

The first two Blu-ray discs I bought were both Disney cartoons made when a guy named Walt Disney was still around to make them: Snow White and the Seven Dwarfs and Alice in Wonderland. I don’t think Snow White is currently available as a legal stream or download. The recent reissue of Alice is, but the Blu-ray version comes with a bevy of worthwhile bonus material, and I’m not sure whether any of it is available anywhere but in the shiny-disc version. (Apple’s iTunes version makes reference to “iTunes Extras,” but I can’t figure out what they are, and they work only on Windows PCs and Macs.)

Am I going to go from Blu-ray skeptic to Blu-ray addict? I don’t think so: If I just want to watch something once and it’s available in non-physical form, that’ll probably still be the cheapest, simplest option. And for now, the only place I can watch Blu-ray discs is in my living room: iTunes, Amazon Video on Demand, Vudu, and other options all give me more flexibility.

But it’s officially official: My strategy of avoiding Blu-ray entirely didn’t pan out. For now, the video I consume is going to come in multiple flavors: streams, downloads, DVDs, Blu-rays, and the occasional musty old VHS tape. I’m still looking forward to doing away with physical media, but it’s going to take a while. Ask me again in, oh, 2014 how it’s coming along…

Many who got the mysteriously worded invitation expected to see the rollout of Samsung’s rumored tablet. Samsung instead presented the world’s first portable Blu-ray player with 3D output, a gadget that looks a lot like a netbook except for the DVD slot on the right-hand side.

Samsung also rolled out three new plasma 3D TVs–including a 50-inch entry in the Plasma C490 Series, the first 3DTV from Samsung in the $1,100 bracket–along with an LED 3D TV, a far pricier 65-inch model in the LED C8000 Series which goes for around $6,000.

Samsung also gave the first public demos of a new software application for iPhones and some Samsung phones – recently issued quietly in “soft release” – that lets you remotely control a Samsung TV from a smartphone. Editions for other phone platforms will follow, said Olivier Manuel, director of content in Samsung’s Consumer Electronics Division, speaking with me at the event.

Also new are two more software apps for Samsung TVs: 3D Video On-Demand, for sneak previews of forthcoming 3D movies, and ESPN Next Level. The apps work only on Samsung’s highest-end “Internet-connected” HDTVs.

“We’re the only manufacturer [of Web-enabled TVs] to have real applications. The rest just have widgets,” Manuel contended.

ESPN Next Level, for example, lets you research players and check out predictive picks in a smaller window while you watch a game on the remainder of a large flat panel TV. To spur more app development for its TVs, Samsung this week announced a developers contest with half a million dollars in total prizes.

Samsung wants vendors to tweak existing apps–even business apps–to run on its TVs, Manuel told me. Samsung’s developers’ kit supports Java and Adobe Flash Lite, and Samsung is even contemplating the possibility much further down the road of apps that will run across TVs as well as other platforms, such as smartphones.

The 3D Blu-ray player introduced this week, the BD-C8000, lets you play back content either from a Samsung app or a Blu-ray DVD remotely on a Samsung HDTV when the two machines are connected over WiFi and HDMI.

Yet while the 3D player allow you to send 3D content to the TV, you can only view video in 2D on the player’s 10.3-inch screen, said Steve G. Panosian, Samsung’s director of marketing for Samsung’s DLP and plasma HDTV visual display products.

3D TV is a very big deal for Samsung indeed. This week’s event marked the second 3D TV-centric press conference to be hosted by Samsung in New York since March.

Market statistics are hard to come by, but Korean newspaper Chosun reported in June that Samsung has sold 270,000 of the 300,000 3D TVs actually purchased so far around the world.  Based on those numbers, some analysts figure that Samsung currently owns a commanding 90 percent of the 3D TV market.

Earlier this summer, Samsung 3D TV competitor Panasonic unveiled a partnership with DirecTV that’s resulted in a suite of three dedicated 3D channels. Those two companies are also working together on 3D content development.

Cable TV providers are also putting together 3D-only channels, noted Bill Hadam, Samsung’s director of marketing for Digital Audio/Video, during another interview at the Samsung event. Yet Hadam even wishes that other manufacturers would get more active in 3D, to help grow the whole market.

Hadam told me that, despite the 2010 product announcements, 2011 will be the year when 3D TV starts to hit the mainstream market. “Consumers will begin to ‘get it’ about 3D in 2011, just as they’ve already ‘gotten it’ about HDTV,” Hadam said.  As with HDTV, continuing price drops on 3D TV will help considerably, he predicted.

Yet Hadam also acknowledged that, at this point, 3D TV faces one challenge unknown to 2D HDTV: the aversion that a lot of people still feel to wearing 3D glasses in their homes.

Player costs have dropped at about the same rate as DVDs did, falling from a high of $800 at launch in 2006 to an average cost of $221 on Black Friday according to research firm Envisioneering Group. Chief among the reasons for the drop appear to be a marked drop in component costs, allowing prices to fall.

However, the deep discounts on Black Friday seem to be significantly more than what happened with DVDs, and probably has a lot to do with a realization that time is running out for Blu-ray.

Let’s face it: the format probably has one more Christmas season — two at most — before streaming media becomes a serious competitor in delivering high-definition to the home. Already, companies are moving along with their plans (take Apple’s rumored television service for example), and I feel I can say with some confidence that by Christmas 2011 there is going to be quite a solid fooprint for ultra-fast broadband, i.e. fiber optic to the home and the like.

Streaming HD is the next logical big thing — the overhead costs are far lower than producing discs and the players that play them: all that is missing is the capable broadband connection. It’s coming, however, and should be here sooner than we think. The window is closing for Blu-ray and its closing fast. It may have won the battle against HD DVD, but in all likelihood its going to lose the war.

One positive that may keep Blu-ray around longer? Internet integration. Most of the players coming out these days offer more and more net-enabled functionality, such as the ability to use Netflix and so forth. This is essential as the shift to streaming media continues. But it may already be too late, and the format’s fate sealed. Whether or not this was Sony’s fault is something that will certainly be debated in the years to come.

The DOJ is not the only government agency worldwide looking into Sony’s practices: other countries are apparently also requesting information as part of a wider investigation into the industry. It is unknown whether any other companies may have received requests for information.

An educated guess would lead to the investigation centering around price-fixing. While it’s not known, Blu-ray prices have remained high even though the technology has now been commercially available for over three years, and its competitor HD DVD has been gone for nearly two-thirds of that time.

Then again, it could have nothing to do with Blu-ray. Fact is we just don’t know much at this point. More on this as we get it…

(Hat tip: IDG)

Asked whether Microsoft will add a Blu-ray player to the Xbox 360, Ballmer said “Well I don’t know if we need to put Blu-ray in there—you’ll be able to get Blu-ray drives as accessories.”

On follow-up with Microsoft PR, Gizmodo got the same line that we’ve already heard from Microsoft, that its current plan is to support streaming video and on-demand movies from the Zune Marketplace. “As far as our future plans are concerned, we’re not ready to comment,” the handlers said.

A couple things to consider: First, if you watch the interview, Ballmer’s remarks aren’t as clear as they appear in quotes. It seems as if he’s throwing out the Blu-ray comment off-hand, not announcing a new product, and Ballmer is pretty guarded in the rest of the interview. Second, Ballmer has slipped up before. In June, he spoke of a new Xbox 360 model in 2010, leading to speculation that the Project Natal motion sensor would launch with a redesigned Xbox 360, and forcing a flurry of carefully-worded denials from Microsoft that any new console was on the way.

I would guess that Ballmer was merely talking about owning any old Blu-ray player on the side, but the wording of Microsoft PR is intriguing, because it’s not a firm denial. Maybe the company’s keeping its options open.

That said, I don’t think the Xbox 360 needs a Blu-ray player, especially an external one. Sure, it could allow you to launch movies from the console dashboard and sign into Xbox Live while watching a film, but those benefits seem negligible to me. Besides, Microsoft already bet on HD-DVD with an external player (pictured above), and it failed. If the Xbox 360 is supposed to live until 2015, as executives assert, Microsoft should stick with online video instead of saddling consumers with another technology that will ultimately be overshadowed.

Here’s why:

It’s not truly part of the digital world. These days, I’m less interested in getting better image quality, and more interested in doing stuff with content–sending it via wireless networking to multiple screens in my house, sticking it on my iPhone, storing it in the cloud. Blu-Ray doesn’t help with any of that. In fact, it’s designed specifically to prevent me from doing it.

The content isn’t there. At least not for me. I admit that I’m not representative of the Average American Consumer here, but I’ll never buy any blockbuster movie on Blu-Ray. I like obscure animation and box sets that aren’t going to sell by the million. For now, they come out on DVD, not Blu-Ray. That’ll change. Eventually. Probably. But if I bought a Blu-Ray player today, I’d mostly use it to watch DVDs.

It’s a stopgap. Like the 2.88MB floppy disk, Blu-Ray is ultimately an impressive (and pricey) improvement on a technology that’s going to go away. By 2012, it’s going to look almost as retro as VHS. Okay, it might take a year or two more than that. But no more.

I’m not saying that Blu-Ray will never show up in my living room or inside a computer I own. (Hey, I was a late adopter of DVD, too.) But I’d say the odds are less than fifty percent that I’ll ever get it–at least as a conscious decision which I’m excited about. (The day will presumably come when all computers that sport optical drives have it.)

But enough about me: