HD DVD Player Drops Below $200

Despite the fanfare, the battle for control over the next-generation DVD market is still inconsequential; the DVD version of Transformers sold 43 times more copies than the HD DVD version, which was the best selling title thus far. But that could change this holiday with players finally dropping below $200.

Circuit City and Wal-Mart are now selling the Toshiba A2 -- a second-generation HD DVD player -- for $198, over $100 off its original price of $299. The A2 only offers 1080i output, but most new televisions can do 1080i-to-1080p conversions better than players anyway, and firmware upgrades keep it as up to date as current Toshiba HD DVD players.

Although the price drop may be more of an effort to clear stock for the new A3 rather than attract customers, it's a sign that high-definition prices are starting to reach the magic $199 number where DVDs took off. The impending launch of a Chinese HD DVD-compatible (but different due to piracy concerns) format could bring even cheaper players later this year.

This could be bad news for Sony's Blu-ray format, which has sold far fewer standalone players than HD DVD due to much higher price tags. Sony's trump card to date has been the PlayStation 3, which includes Blu-ray support and has brought in the majority of high-definition disc sales this year, outselling HD DVD discs nearly 2 to 1.

Such a position has enabled Sony to secure exclusive movie studio deals (Sony itself has a studio), as well as recent promotional agreements with Blockbuster and Target. But the HD DVD group has surprisingly little concern about the matter, claiming that when the customers are there, both formats will be supported equally.

Those behind HD DVD told BetaNews earlier this year that the tide will turn when standalone players reach $199 and consumers start buying (Xbox 360's HD DVD add-on is already $179, but requires an Xbox). Microsoft's Kevin Collins noted that once HD DVD hits 1 million set top players sold, which could happen before the end of the year, none of the movie exclusivity will matter, because the studios will go where the money is.

But there's still quite a bit of uncertainty in the marketplace, which may scare consumers off this holiday season.

Even at $199, buyers will worry that their investments may be worthless in a couple years. This is why HD DVD is banking on combo-discs to bolster sales. Most new HD DVD discs include a standard-definition DVD version of the movie on the other side, making them usable no matter what the future holds.

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