How HD DVD Got its Groove Back

ANALYSIS: Sources close to retailers indicate that Toshiba sold over 90,000 $99 HD DVD players over the weekend, and that figure only represents a portion of the retailers that participated in the frenzy.

According to Video Business, the 90,000 count includes Toshiba HD-A2 players sold at Wal-Mart, Best Buy, and Circuit City along with a few other brick and mortar outlets. But it apparently doesn't include online retailers who also participated in the price drop, such as

BetaNews' own estimates placed sales at around 40,000 to 70,000 within Wal-Mart alone based on information compiled about stocks at the discount retailer's various locations around the country.

Wal-Mart's move spurred a retailer war over prices of the players, even bringing down the cost of other models as a result when HD-A2 stocks depleted. It's fairly likely that total sales of all HD DVD players eclipsed the 100,000 mark during just the past week.

Sales of the Toshiba HD-A3, the successor to the HD-A2, appeared to be equally brisk, with many retailers selling out of their stocks quickly after the older model became hard to find. At many locations, the newer player was selling for $199 - $100 off its original retail price.

Furthermore, sales of the HD-A2 alone over the past few days are nearly equivalent to total sales of the top Blu-ray player, Sony's BDP-S300, which has shipped 100,000 units since its introduction over the summer.

BetaNews has a request in with Toshiba for full sales numbers, but the company thus far has not provided specific figures.

It All Comes Down to Price

Over the weekend, BetaNews talked to several new-to-HD disc consumers and there was almost a universal reaction that price was the primary factor behind the purchases. Buying an HD DVD player, however, did not necessarily mean the door was shut to Blu-ray.

"I was waiting on the price to come down on the hardware to where i thought the return on investment was there, because I know lots of money will be spent on software once I had a player," Mike Taylor of Park City, Utah told BetaNews.

The story was the same from David Balfoort of Syracuse and David Lazerson of Cape Coral, Florida. While Lazerson remains open to Blu-ray if the price drops below $250, Balfoort says he'd only consider the opposite format if it "wins the war."

Another interesting finding of the interviews was that no one felt worried about their purchase, despite the future of high-definition discs remaining up in the air. "I'm not nervous at all about the purchase," Lazerson said, pointing to the upconversion feature of the player, which he noted alone makes it worth the $98 purchase price.

Balfoort, who already had a extensive home theater, said that an HD movie player was the last piece of the puzzle. "I generally purchase a DVD player every 12-18 months so there was no nervousness involved," he told BetaNews.

Blu-ray's Dilemma

Through these interviews, it seems clear that Sony's recent offerings of a small price cut this holiday may not be enough to counter what could be increasing momentum for HD DVD. With so many new players now in consumers' hands, it can only be expected that disc sales will increase as well.

Multiple studies show that the PlayStation 3 alone will not be enough to keep the Blu-ray format afloat. Six out of ten users aren't even aware that the device can play Blu-ray movies, and out of the remaining four, only two had actually used the player in the past month to play a disc, according to NPD Group.

In addition, a rising number of HD DVD owners will make it hard for Sony to make the case to both retailers and studios to support its format exclusively. Consumer demand will keep HD DVD on the radar of the studios who currently support it, and will give the format leverage to lure new studios in.

It is not out of the question that this past weekend's moves by Wal-Mart have in the very least extended the format war much longer than many Blu-ray supporters would have imagined, and very well could have provided the needed momentum toward a successful conclusion for those in HD DVD's camp.

"Wal-Mart doesn't have these sales for no reason, there's always a business aspect," an employee told BetaNews on Friday while customers waited in line to snap up a $99 HD DVD player. "You can fully expect that this will be the price next year; they are always ahead of the curve on that."

From Friday's action, it looks like the nation's leading retailer wants to play kingmaker. And from the results we're seeing today, it just may have.

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