Hollywood is keeping its fingers crossed that the Blu-ray format will pull its nadgers out of the fire this Christmas.

The U.S. home video market has been falling like a skydiving team of elephants who have forgotten to pack their parachutes. Now executives, hosted by The Digital Entertainment Group, a consortium of movie studios and electronics manufacturers, forecast that 10.5 million households would be able to play Blu-ray videos by the end of the year. These will be on 2.5 million standalone players and 8 million PlayStation 3 game consoles.

This figure is lower than the 14.4 million households that Adams Media Research said in June would be playing Blu-rays by the end of the year. But, it means that more than a million Blu-ray players will be sold over the Christmas holidays.

David Bishop, President of Sony Pictures Home Entertainment, said that the only dark cloud is the economy. But, he adds that there had been no slowdown in the adoption of the PlayStation 3.