How in the world does Toshiba think it's ever going to make any money from the HD-DVD format? I mean, seriously.
You may have heard by now that Toshiba has made pre-Black Friday arrangements with Wal-Mart to effectively dump its HD-A2 HD-DVD player starting this Friday (this weekend only) for just $98.87. You may also have heard that Best Buy has followed suit. Supplies are limited, of course, and the offer is apparently not valid in some parts of the country that have state anti-dumping laws.
Wikipedia defines dumping as "the act of a manufacturer in one country exporting a product to another country at a price which is either below the price it charges in its home market or is below its costs of production." Toshiba's move isn't really anti-competitive, because there are no U.S. manufacturers making HD-DVD players. But it's that "below its costs of production" part that applies in this case. The HD-A2 arrived in the States with an original MSRP of $499.99. Now, Toshiba is letting it go for just $99. There's no way the player cost less than $100 to manufacturer. Just. No. Way.
You might wonder: How can Toshiba possibly have enough HD-A2s left to sell at just $99 at large, nationwide retailers? Simple. It's because they didn't sell originally, so plenty of stores still have them sitting on shelves, gathering dust. Toshiba is eager to clear them all out at this point, and Wal-Mart and Best Buy are happy to help.
Clearly, the HD-DVD camp understands that low price is really the only card they have left to play in this format war. Porn hasn't won the war for them as predicted, nor have online bells and whistles, or combo discs/players. The obvious question would be: Why in the world would any other hardware manufacturer want to join Toshiba's foolhardy strategy of driving player prices down to next to nothing? It's no accident that not a single other major manufacturer has released a stand-alone HD-DVD player (and no, the Venturer doesn't count). Given how dramatically Toshiba has slashed prices on HD-DVD players over the last year, you have to wonder how long they can keep losing money.
Forget for a moment that the HD-A2 isn't capable of delivering full 1080p video - that doesn't matter. Why? Because anyone who is so price sensitive that they wait until a high-def player price hits $99 to buy one isn't likely to have an HDTV set yet. Being super bargain shoppers, they aren't likely to want to pay $30 for an HD-DVD movie either. I'd bet many of the people who jump on this sale will either be using them primarily as upconverting DVD players, or they're already diehard HD-DVD supporters and are buying them as second players. For those regular consumers who take the bait, I wonder how they'll feel when they realize they can't play those big Disney titles in the "blu" boxes due next week.