It may be true that “what goes up, must come down,” but the opposite is not true in consumer electronics these days. Once a price goes down, it pretty much stays down. Case in point: the new Toshiba HD-A3 HD DVD player. This is the replacement for the HD-A2 that caused so much excitement in recent weeks. Circuit City knocked the price down to $199.99, and then Wal-Mart and Best Buy went to town selling out their inventories at $99.99. Why? Because the new HD-A3 was coming, and they wanted to clear the shelves.
So now the HD-A3 is available, and guess what? Circuit City already has it at the $199.99 price that caused such a stir for the HD-A2. This is the new expected price point for an entry level HD DVD player, and yes, you still get five free HD DVD movies in the deal. With the movies selling for $30 a pop, that’s $150 of the value right there. (Oh, and Circuit City is also running a “buy two, get one free” deal on HD DVD and Blu-ray mov discs.)
HD DVD players are now considerably less expensive than Blu-ray, and even priced lower than the PlayStation 3. I expect that the next four weeks are going to show a huge shift to HD DVD in the market. At these prices, Blu-ray doesn’t stand a chance.