Toshiba drops price of HD DVD players as format war continues

In a sign the high-definition format war is far from over, Toshiba on Monday dropped the suggested retail price of its entry-level HD DVD player to under $150. That puts the HD-A3 $250 cheaper than Sony's PlayStation 3.

The MSRP of the HD-A3 will now be $149.99 USD, while the HD-A30 with 1080p output is lowered to $199.99 USD. Toshiba's high-end HD-A35 will now be priced at $299.99 USD. Retailers are already undercutting these prices, with Amazon selling the A3 for just $134.99, while TigerDirect has it listed for $129.99.

Although the move is surely to be branded a "fire sale" by Blu-ray supporters, Toshiba says the price cut is part of a broader marketing strategy aimed at increasing exposure of HD DVD among consumers. Despite the constant rhetoric, neither high-definition format has made an impact in the marketplace compared to standard DVD.

The effort by Toshiba is a response to Warner Bros. snubbing the company just one day before the HD DVD press conference at CES. Warner decided to back Blu-ray exclusively, leading to false speculation that Paramount and Universal would follow suit. This left Toshiba, Microsoft and other HD DVD supporters facing an onslaught of negative press and consumers being told not to invest in the format.

Toshiba will roll out television, print and online media campaigns to promote HD DVD, and work with both studio partners and retail outlets to jointly advertise the format. The manufacturer has also rolled out an "HD DVD Concierge" phone line to help answer any questions consumers have about HD DVD.

Although HD DVD touts the ability to produce combination discs and was first to the market with advance interactive features, price is the determining factor when it comes to sales. Consumers snapped up HD DVD players over the holiday when prices dropped below $200, and the format greatly outsold standalone Blu-ray players.

"While price is one of the consideration elements for the early adopter, it is a deal-breaker for the mainstream consumer," said Yoshi Uchiyama, Group Vice President of Toshiba's Digital A/V Group. "Pricing is the most critical determinant in consumers' purchase decision of the next generation HD DVD technology."

Bringing down costs has been one of the major problems hindering Blu-ray adoption. The format has taken the lead in market share solely because of the PlayStation 3, which can be used to play Blu-ray movies. Standalone players are more expensive than the PS3 and cannot be upgraded to the upcoming Profile 2.0 specification, which adds Internet connectivity.

Toshiba is hoping the price drop will enable HD DVD to continue the momentum it had over the holidays, and perhaps convince more studios to re-consider the format. With over 1 million HD DVD players sold, it's hard to ignore that number of customers. Toshiba is also pitching the players to those who want to upconvert standard DVDs to high-definition resolution.

Amazon and other retailers have also slashed prices of HD DVD discs, many of which are now 50% off. Many Blu-ray moves are similarly priced, making it a perfect time to buy no matter which format you support.

Microsoft has not said whether it will lower the cost of its HD DVD add-on for the Xbox 360, which currently runs $179, but a similar price drop is expected soon.

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