As if it wasn’t bad enough that sales of the PlayStation 3 are lagging far behind the competition, word came out today that Paramount and their Dreamworks studio will be dropping support for the Blu-Ray DVD format in favor of the HD-DVD format. This is somewhat big news given that the PlayStation 3 was supposed to act as the lead roll-out platform to get the Blu-Ray format into homes.

Completely abysmal sales of PlayStation 3 consoles combined with the outrageous prices of games and Blu-Ray movies are signaling a bad situation for the folks at Sony. In all truth, the HD-DVD prices are just as high as the Blu-Ray ones.

If I was an investor in Sony (and I’m not), I would be very concerned. Not only are their main video game rivals outselling them almost 3 to 1, but at least one of those rivals (Nintendo) actually makes a profit on sales of their consoles and games. Neither Microsoft nor Sony make a profit when someone buys their consoles…they actually lose money. Scary.

Of course, Sony has a million other products that are top of the line and of great resale quality so I don’t know if I’d be selling at this point. And they also remain the industry leader in terms of total number of high-definition DVDs sold. Target is also selling Blu-Ray DVD players exclusively in the next few months and Blockbuster just said it will only rent Blu-Ray DVDs…so the future looks good overall, but there has got to be some concern that the main roll-out platform for the Blu-Ray format is looking more and more like a distant third against its competition.