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Blu-ray provides price cut agony to HD DVD device sales

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Sony’s announcement this week of a new Blu-ray device in time for the Summer season in the US is more about stopping people going out and buying a HD DVD player, than making more sales of its existing device.

In pictures shown of the device on various gadget websites, it’s like someone took the original and just shrunk it without changing any of the features, and it is already beginning to look more like a DVD player rather than one of those ancient VHS monstrosities.

The price will go to $599 and this could already have the immediate effect of slowing the HD DVD campaign to a crawl. Blu-ray has been winning the disk war by a ratio of about three to one recently, up from the two to one it achieved in January: Sony has overhauled a considerable lead by the Toshiba and Microsoft-led HD DVD faction by the simple expedient of putting a Bu-ray player in every Playstation 3.

All of this has been achieved despite Blu-ray players costing twice that of HD DVD players at $1,000. But cutting 40 per cent off them with the launch of the BDP-S300, the disk format war could be nearly over. The only way to keep the alternative format devices shipping is if they go for yet another price cut, and already there are fears that the HD DVDV devices are shipping for less than the price of the components.

And if this announcement also freezes the sales of the earlier versions of Blu-ray devices, that still plays to Sony’s hand, since it will not stop the sales of the PS3 so Blu-ray disk demand will continue to rise.

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