According to an NPD report, as many as 70% of Xbox 360 owners are unaware of the HD capabilities (both gaming and video) of the Xbox 360. It’s almost as bad for the PlayStation 3…as many as 60% don’t know that their console can play back Blu-Ray movies and only 50% are aware of the HD gaming aspects of the $500 console. (Awareness of the HD DVD add-on for the 360 was not included in the poll.)
it’s very likely that this is a side effect of the low user base for HDTV. Even I, while "aware" of the HD abilities of the Xbox 360, was playing in Standard Definition until just recently. There have also been other stories recently about people buying HDTVs that are watching standard TV because of improper cabling and setup. Most people don’t have the visual sensitivity to notice the enhanced quality of HD.
It would have been interesting to have had NPD go the extra mile and ask how many of the respondents had an HDTV. I would suspect that the "awareness" factor would have been larger for those that had the prerequisite equipment. Still, the report tells a very interesting story…for two companies battling for HD supremacy, neither is getting the word out fully or doing a good job of educating their consumers. In fact, most people probably won’t even know what that shiny new HDMI port in their Xbox 360 is for.