Holiday Sales Frenzy – Friday’s HD-DVD Smoke Clears

Last Friday’s pre-Black Friday sales wars kicked off what should be an interesting holiday season for the little format war that is going on. The opening salvo was fired not by either format backer, but retailers starting with Wal-Mart who first dropped the $299 MSRP HD-A2 to $198 and after the competition followed suit, to $98 for a one day sale.

Holiday Sales Frenzy - HD-DVD Players as low as $99

As the smoke clears from this first battle field, estimated numbers are coming in and it looks like around 90,000 units moved over the weekend.

High Def Digest: Report: Weekend Toshiba HD DVD Player Sales Top 90,000

Video Business: HD DVD set-top player $99 sales moves units

BetaNews: How HD DVD Got its Groove Back

BetaNews has estimated that between 40,000 to 70,000 of the players were sold by Wal-Mart alone. The sales number estimates are incomplete, based only on the major players, Wal-Mart, Best Buy, and Circuit City, and are not comprehensive sales numbers for all retailers, so the actual number sold is potentially higher.

Demand was strong enough over the weekend that Best Buy sold out of the HD-A2 and rather than stiffing customers has apparently started substituting the $299 HD-A3 to fill orders.

The end result of the sales frenzy is that HD-DVD is approaching 500,000 standalone players in the market. It also illustrates a point that has been harped on by market analysts: price does matter to most consumers.

In the battle over next-gen DVDs, the winner may be decided more by price than by which format has the most backers

Businessweek: Blu-ray vs. HD DVD: Price Matters

Blu-ray players have thus far typically been priced twice what competing HD-DVD players have been priced. Blu-ray has attempted to leverage higher price to suggest to consumers some sort of quality advantage, but the same 1080p resolution is available in both formats and this discs themselves are nothing but data containers. While one container is larger, they hold the same content: MPEG-2/4 and VC-1 encoded 1080p video.

The format war is still at an early stage, both with insignificant market penetration compared to SD DVD players. Early adopter sales numbers don't really mean anything as much as both formats trumpet such numbers about. Until HD optical disc sales are an actual blip on the retail radar, sales figures and supposed sales advantages are irrelevant.

But with HD players coming down to prices that are competitive with upscaling SD DVD players, this may move a format out of the early adopter phase and into the mainstream

Like the company or not, Wal-Mart is the mainstream.  It looks to be an interesting holiday sales season.