Katzenberg said he wouldn't discuss deal terms but acknowledged that the Shrek character and the heroes from the studio's upcoming "Bee Movie" and "Kung Fu Panda" would likely be enlisted in marketing efforts to promote the HD DVD format.
Moore also wouldn't comment on deal terms but said, "We think this decision is in the best interests of Viacom and of the consumer."
Moore said Paramount's research showed that those who bought stand-alone hi-def players -- as opposed to the popular PlayStation 3 game consoles that also play Blu-ray movies -- purchase more movie discs.
"Sony got off to a big lead because of the PS3, but we expect that to change dramatically," Moore said.
Sony has sold 1.4 million PlayStation 3s in the U.S. since launching the game console in November 2006, according to NPD Group. Ninety percent of Blu-ray movies are being played on the PlayStation 3, which consumers buy primarily to play video games, analyst Roden said.
Sony will release the first Spielberg film in the hi-def format, the 1977 classic "Close Encounters of the Third Kind," on Nov. 13.
Analysts said that until Monday, Blu-ray had been perceived as the likely winner of the high-definition movie war, with all studios in its camp either fully or partially except Universal.
Monday's announcement gives HD DVD a fighting chance, said Van Baker, an analyst at Gartner Inc. But it also could keep consumers on the fence and ultimately prevent sales of high-definition movies from taking off.
"The customer attitude right now is wait and see," Baker said. "This just prolongs that wait-and-see period."
One reason for the fierce competition is the high stakes involved in owning the technology licenses to the next-generation of DVDs, Baker said.
"It's a winner-take-all battle," he said. "And that's why you see both sides digging in their heels.
"Most consumers are going to choose not to spend their money" when there's a format war, he said. "They're going to continue to buy [regular] DVDs and say that's good enough."
But lower prices will help the HD DVD eventually triumph, said Blair Westlake, vice president of software giant Microsoft Corp., a backer of HD DVD.
"Consumers want hardware that's low priced in order to enter the high-definition market, and HD DVD is fast approaching that mark," Westlake said. "Consumers know they can buy a standard def DVD player today for less than $100, so they don't want to pay five or six times that to get into a new format."
