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HD DVD 'shock': Price cut encourages people to buy

Last weekend the Toshiba HD-E1 was reduced to just $99 in some US stores -- a move which seems to have sparked interest in a format which has been enjoying a number of successes recently

We don't have a degree in business, but it stands to reason that reducing the cost of a formerly expensive item down to a rock-bottom price might possibly produce a sales boost. In the US last weekend a number of stores reduced the price of the Toshiba HD-E1 (they call it the HD-A2) down to just $99 (£47). Unsurprisingly, they sold a boatload of them.

The numbers being reported by the US press suggest 90,000 units were shifted, which has increased the number of HD DVD households by 35 per cent. But there's one fact we shouldn't lose sight of here: the market for all high-definition players is still tiny, even in the US, where HDTV ownership is far greater than in Europe.

It goes without saying that there can't have been any profit made on the players, and it's not clear if it's Toshiba or the retailers taking a hit on the low retail price, but someone somewhere is losing cash.

Of course, the PlayStation 3 is still pushing the total numbers for Blu-ray players up, but some figures claim that only around 40 per cent of people actually know their PS3 has Blu-ray built-in. That's probably mostly made up of the 60 per cent of PS3 users who don't have their console connected to a high-definition TV.

It seems reasonable to conclude that there's a great deal of demand out there for high-definition players, but people are being put off by the price, and possibly the two competing formats. If you take price out of the equation, it seems there's plenty of interest in HD DVD, despite what the Blu-ray camp is trying to make us think. -Ian Morris