You just brought up a good and important point.  If the bottom line is saying that pricing drives hardware sales, then blu-ray is in deep trouble.  If people are only willing to pay <$150 for a player with free movies, how likely are they gonna buy a $399 PS3 or $445 standalone player with just spiderman 3?

It's like BetaMax/VHS fight all over again. BetaMax was a fine piece of equipment, but too expensive in the end. Folks aren't worried about quality - they want something that does a good job playing a movie. Take your receipt for your $600 BR player and $5 and get a grande cafe latte at your local Starbucks. I say bravo to the newest members of the HD DVD crowd, though I think a lot of folks bought the HD DVD to get the free movies and the player and flip them both ...

I have to say this is huge, a 100 bucks for the player and 5 movies? Even with doubts about who will emerge on top this deal still seems worth it, pick it up with Transformers and that's a pretty sweet.

Anyone can argue that blu-ray is doing better and it has the backing of the ps3 but it's hard to convince someone to shell out 5 times the price, for a product that really isn't much better, it just currently offers some different exclusives, and people are going to reason that these $100 players are going to storm the market which will break future excusivity.

Every time I think this war is simmering down it gets crazy again.

Toshiba has hit the sweet spot when it comes to price. If Sony cannot match, it will lose the holidays both on the HD front and the video game front.

Sorry!  My bad.  The A3 is ALREADY OUT at $199.99 at Best Buy.

http://www.bestbuy.com/site/olspage.jsp?skuId=8494435&type=product&id=1186003898783

Well the A3 for 200 bucks is still keeping the price low.

An interesting side note here... Sony is most certainly still losing money on the PS3 regardless of the SKU. Why is this? Because it is the same price as the current cheapest Blu-Ray drives and they are reportedly at best break even or losing money on those. If that is indeed the case, they still have to factor in the Cell, memory, controller, and so on in the PS3 when considering the total cost.

Regardless, this leaves Sony fighting on two fronts: The PS3 (a trojan-horse Blu-ray player) and Blu-Ray standalone. I don't think Sony is going to get into a price war on both fronts meaning I doubt we see a $299 or less Blu-Ray player any time soon.

If Toshiba decided to bet it all, right here, right now, they would take Sony-sized losses on the A3 and move em out cheap enough to sell multi-millions over the holidays. There is no doubt that Sony will be moving 2-3 million PS3 systems globally over the holidays. HD-DVD has to accomplish the same and they aren't going to do it with $200 players as J6P won't spend that kind of coin just to get a player...

Toshiba wont go all out, but if they sell enough consoles this holiday they can ensure HD DVD's survival, at least as a minority player.

Also lets not forget the psychological victory HD DVD will win if we assume kn's guesses are correct. HD DVD will sell more disks this week, and with a monumental rise in installed base, blu-ray should fall beneath its 2-1 lead in disk sales.

I don't agree.  Sony has always been an expensive brand.  And although I do reckon that Sony is making a loss on the PS3 at the moment.  I certainly don't think they are making a loss on the standalone Blu-ray players.  Have you also noticed that Samsung is starting to price highe...and Toshiba in general is pricing lower.

What Toshiba need to watch out for is the cheapening of their brand overall.  Once this happens, they can forget selling their more expensive higher end models and will end up selling only budget players, TV's and laptops across the board.

Isn't Sharp due to release a budget Blu-ray player soon as well.  I reckon we will see a $249-$299 Blu-ray player sooner rather than later.