An article in Reuters cites Hollywood sources who say that Wal-Mart is ditching the sale of UMD movies, and that UMD sections in all retail stores is shrinking.

But signs are bad on both ends of the line; Some movie studios are also drifting away from the format. Universal Movie Studios has stopped producing UMD movies entirely, with one executive quoted as saying "It's awful. Sales are near zilch. It's another Sony bomb -- like Blu-ray." Can a format bomb before it's released?

Paramount Pictures Home Entertainment hasn't unequivocally quit UMD production, but rather "evaluates the PSP platform for each title" and releases a film on UMD "if it makes sense for business reasons and the target audience." But as a Paramount exec put it, a little more bluntly, "Releasing titles on UMD is the exception rather than the rule. No one's even breaking even on them."

Other movie studios have drastically cut down their release schedules. Another executive at an unnamed studio says the problem is "It's a game player, period." Well it's not having much luck in that department, either.

Sales of UMD movies were surprisingly strong when the system first launched, with two movies even breaking 100,000 units sold in two months, making the sudden lack of interest even odder. Some suggest there may have simply been too many movies released too fast -- more movies than games, in fact. Others say that the PSP lost out in favor of the recently released video iPod. While still others suggest the novelty simply wore off.

Another attempt for the multimedia all-in-one companies have been trying to make since the early '90s falls on its face. Of course, using a specialized format that didn't work in any other player didn't help. One wonders how this will affect plans for Microsoft's rumored handheld, considering it was supposed to be a similar movie/music/gaming "PSP killer." The PSP seems to be doing a good enough job of that on its own, so is that really the system you want to be patterning yourself after?

Source: Gamecloud