Plunging player prices to reveal Blu-ray vs HD DVD winner?
A clear leader in the battle to be the top next-generation optical disc format could emerge next year as player prices plummet and take of the cost of entry out of the equation, market watcher Understanding & Solutions (U&S) has claimed.
Context & Ripple Effects
The next-generation disc war has been running since at least December 2005, when the [[a:1176154|standoff between the Blu-ray and HD DVD camps was already flagged as approaching a critical juncture]]. By mid-2007 the tone had shifted: Sony's June price cut on its new Blu-ray player signalled the hardware side of the fight turning into a discounting contest, while Business Week warned the same month that both formats could still lose outright.
First-order effects
- U&S's forecast removes price as a differentiator: if entry-level players for both formats fall toward commodity levels, studio exclusives and catalog depth — where Blu-ray backers staged a two-day Hollywood offensive in October touting titles like Cars and Ratatouille — become the deciding factor.
Second-order effects
- HD DVD's camp faces pressure to match player discounts or concede the mass-market shelf; with observers already arguing by August 2007 that Blu-ray had the war 'nearly won', a price-led holiday season would force HD DVD to compete on content deals rather than hardware cost.
Third-order effects
- If U&S is right, the pattern points to format wars being settled less by technical merit than by which camp can subsidise hardware fastest and lock up exclusive studio catalogs — a structure where the losing side's installed base becomes stranded inventory.
The trend: Next-generation optical disc adoption is shifting from a standards battle decided on specs to a consumer-price and exclusive-content race, with market watchers expecting a single winner to emerge once entry costs stop mattering.