Media Wonk

Good news, bad news for HD DVD - June 12, 2007

How’s that again?

One day after proudly announcing that its HD DVD format commands 60% of the market for set-top high-def players, Toshiba announced Tuesday that it was cutting it’s sales forecast for (wait for it…) HD DVD players. By 44%.

Oops.

Toshiba officials told Reuters in Japan Tuesday that the company now expects to sell 1 million HD DVD players in the U.S. by the end of calendar 2007, down from the 1.8 million originally forecast.

“Obviously we are going to have to lower our previous global estimate” as well,  Yoshihide Fujii, the head of Toshiba's digital consumer business, added, without offering a new estimate.

He might as well lower the global estimate for the whole blue-laser category while he’s at it.

Last week Sony chopped the price of its gen-2 Blu-ray player from $599 to $499 before the model even hit the market, ostensibly because of breakthroughs in Blu-ray manufacturing that lowered production costs but more probably because Sony figured it out it wasn’t going to sell any at $599.

If production costs are really coming down that much then Sony ought to have chopped $100 off the price of its Blu-ray equipped PS3 console, where slower than expected sales could soon spell strategic disaster for the company.

For both formats, it’s pretty clear that recent price cutting has been an attempt to spur volume, rather than a case of volume lowering costs.

This is going to be a bloody fourth quarter.

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