Not exactly breaking news as this had been somewhat well-known for a little while now, but there are lots of good details in here for WHY it is (apart from the PS3 having just been released a few weeks ago in Europe).
Production costs are also of importance to smaller studios which may not be willing to purchase entirely new equipment in order to press Blu-ray discs, or incur substantially higher costs to produce them. French replication company Qol CEO Laurent Villaume told FT that the risk involved in producing Blu-ray disks isn't comparable to that of HD DVD: "An HD DVD replication line costs about €800,000 and you can make 40,000 discs a day on it. A Blu-Ray replication line costs €1.7m or €1.8m and you can make 10,000 to 15,000 discs a day."
"The expense is prohibitive," said DS DVD CEO Alex Ponti to FT. "Additional capacity will be needed when we produce additional content but that is years away," he added. The HD DVD standard requires players to have an Ethernet jack and European studios feel that they could take advantage of this to offer extra content to HD DVD players over the Internet rather than on the discs themselves.
Hmm...looks like the insane cost to produce Blu-ray Discs DOES matter.