The key number in the battle between the Blu-ray and HD DVD camps is 250,000.

That is the number of players for both formats that the Computer Electronics Association has said likely shipped in 2006, the first year of global sales. Earlier, the organization had anticipated 750,000 players would ship for the year.

South Korea’s LG Electronics said Thursday it would launch a DVD player that supports both Blu-ray and HD DVD as a format war over next-generation DVDs is looming. LG was a high-profile supporter of the Blu-ray format, backed by Sony until it said early last year it would join the Toshiba-led HD DVD camp as well.

And now, tackling this from the other direction. Since Blu-ray and HD-DVD pretty much share *everything* except the physical format and menuing system (BD-J vs. iHD), this makes more sense. Broadcom, and others, have chips which support both formats. It is actually cheaper and easier for them to produce one chip for both markets than to product variants – economies of scale and all. And over the past couple of years there have been some announcements about read heads that can handle both formats. The real issue is going to be cost, with LG, or anyone else, having to pay licensing fees to both consortia. But this is the same truce that has reigned with DVD-R and DVD+R. And for the same reason – royalties. This could catch on, but I still think it would be better to have one side win the war and settle it. I wish the Blu-ray camp would adopt iHD, which would really undermine some of the support for HD-DVD. And most, if not all, existing BD players could be updated to handle it. Heck, it might be possible to implement an iHD engine in Java on top of BD-J.

Consumers wary of buying new high-definition DVD players because of a technology war reminiscent of the days of Betamax versus VHS will soon have a new kind of DVD that might make the decision less daunting.

This isn’t a surprise. I said way back when the formats were introduced that you could combine them because they showed BD/DVD on one disc, and HD-DVD has the same physical structure. And, of course, a dual-sided disc is possible. But I think this will just prolong the pain of the format war, and it will always cost more to produce a dual-format disc.

CES is next week – expect a surge of news.