In a move that is great for videophiles but humbling to Sony (NYSE:SNE), the consumer electronics giant is once again lowering the price of its entry-level Blu-ray disc player. The BDP-S300, a more compact version of the original Blu-ray players that Sony was selling for roughly $1,000 last year, was introduced in February with a $599 price tag. Sony will now make it $100 cheaper.
I know what you're thinking. New products are always priced high to milk the most out of the early adopters. Prices drop as manufacturing efficiencies increase and companies pander to mainstream audiences. However, this is a case where Sony isn't really in control of the pricing at all.
With cheaper HD-DVD players on the market, Sony's had a tough challenge to make Blu-ray the industry standard, despite the superior specs over both the HD-DVD and original DVD formats. A combination of butting heads against a rival HD platform and lackluster sales of Sony's PS3 video game consoles have Sony feeling desperate to establish Blu-ray as the next generation optical disc format of choice.
Yes, the PS3 was supposed to be Blu-ray's Trojan horse. Diehard gamers would snap up Blu-ray playback capable PS3 systems, unwittingly giving Sony the edge in high-def. The PS2 was the runaway leader in the sixth generation of consoles, so why shouldn't PS3 rule the roost as well? Unfortunately for Sony, wider availability of Microsoft's (NASDAQ:MSFT) Xbox 360 and the surprising popularity of Nintendo's (OTC BB: NTDOY.PK) Wii finds the company going from gold medalist to bronze in the early stages of gamer adoption.
With the Trojan horse not getting through into the living rooms of mainstream consumers, Sony has little choice but to market its stand-alone players aggressively.
Engadget speculates this morning that the price cut may eat into PS3 sales. It's an interesting thesis. A lot of people that are on the fence about paying up for a PS3 often justify the purchase on the merits of the console doubling as a Blu-ray player. However, it's not an ideal solution to the quicker and quieter stand-alone players. In making its Blu-ray players cheaper -- in time for Father's Day, no less -- Sony may be competing in a price war with itself at this point.
It's not a pretty sight, but it's one that thrifty videophiles would love to see in all its visual glory.
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Longtime Fool contributor Rick Munarriz has a PS3, but still finds himself spending more time with the family on the Wii these days. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
