PS3 Price Cut: More Impact On PS3 Than Blu-ray

Washington, D.C. (July 9, 2007) -- Sony's decision today to lower the price of its 60GB Play Station 3 from $599 to $499 will likely have only a marginal impact on the Blu-ray-HD DVD war.

The Sony-supported Blu-ray and the Toshiba-backed HD DVD are battling for the new high-def disc market. While Blu-ray appears to be winning, there's no sign that the format war will end soon.

Some analysts have suggested today that PS3's price drop will give Blu-ray yet another advantage over HD DVD. Blu-ray has the exclusive backing of four of the eight major film studios and Blockbuster this month will carry the format exclusively in 1,450 stores.

But although the PS3 has a Blu-ray player inside, Sony has already introduced a standalone Blu-ray player (BDP-S300) priced at $499.

So it's unlikely that many high-def owners considering buying a HDTV disc player will be convinced by a $499 PS3. They would have already purchased the $499 Sony standalone if price was the deciding factor.

Sony, of course, knows this. The main reason for the price drop is that PS3 sales have been disappointing to date. However, with a entry-level PS3 now at $499, sales of the video game console should rise, although perhaps not substantially. The machine is still more expensive than its rivals, Nintendo's Wii and Microsoft's XBox 360.

But even with a modest increase in PS3 sales, Blu-ray supporters can take solace that disc sales and rentals may pick up a bit. Some new PS3 owners will likely give the Blu-ray player a try.

However, Sony today also announced that it will soon offer high-def program downloads over a new 80GB PS3 which will be priced at $599. The downloads could provide added competition for both Blu-ray and HD DVD.

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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

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