Sony cuts price on new Blu-ray player
NEW YORK - With dominance of the market for high-definition movie discs still up in the air, Sony Corp (NYSE:SNE - news). said Monday it is including a small surprise with the new Blu-ray disc player it is shipping this week: a price tag $100 lower than previously announced.
Context & Ripple Effects
Six months after Sony launched its first Blu-ray player, the format war against HD DVD is still undecided, and Sony is attacking on price: the new BDP-S300 ships this week at $499, a $100 (£50) cut from what was previously announced — half the launch price of its first-generation machine late in 2006.
The move lands while dominance of the high-definition disc market is genuinely up for grabs, making hardware affordability one of the few levers left for winning shelf space and living rooms before the format question hardens.
First-order effects
- Sony's $499 BDP-S300 directly narrows the price gap the HD DVD camp has been selling against, putting a Blu-ray deck under the psychological $500 line for the first time in the format's young retail life.
- Retailers stocking high-definition players for mid-year inventory now have a sub-$500 option on both sides of the format divide, forcing floor-space decisions between competing standards.
Second-order effects
- The HD DVD backers face pressure to answer with their own cuts or bundle deals, turning the format war into a subsidy race where whoever prices hardware closest to DVD-player levels seeds the larger installed base.
- Cheaper Blu-ray hardware raises attach-rate economics for the studios backing the format: every discounted player sold expands the audience for their high-def disc catalogs, which carry far richer margins than the loss-leading decks themselves.
Third-order effects
- If the pattern holds — each side repeatedly cutting player prices within months of launch — the high-definition disc contest becomes a war of installed bases and studio exclusives rather than technical merit, and the losing format's hardware partners absorb write-downs on unsold inventory.
- A decisive outcome would hand the winner control of the next physical-disc standard for years, concentrating licensing revenue and studio release leverage around a single specification — the same consolidation dynamic that ended earlier tape and disc wars.
The trend: The high-definition disc war is shifting from specification rivalry to consumer-price warfare, with Sony and the HD DVD camp both subsidizing hardware to lock in installed bases before the format question resolves.