No Increase in Blu-Ray Sales

We've tracked the battle between Blu-Ray and HD-DVD to become the standard-bearer for high definition DVD players. With Blu-Ray emerging as the clear victor, wouldn't we expect increasing sales of their players? Instead, according to this Cnet.com article, sales were down 40 percent from January to February and essentially flat from February to March (2 percent increase).

So, what's going on? First, Blu-Ray prices have increased from around $300 in December to around $400 in mid-March. Apparently, Blu-Ray vendors have elected to take the spoils of war in the form of higher prices rather than greater quantity. Second, the Cnet.com article argues that the relative advantage of high-def DVDs relative to standard DVDs is not substantial enough in the mind of the average consumer to justify the price premium. They predict that "Blu-ray player prices are going to have to drop dramatically, to around $200 probably, to make themselves more attractive to consumers outside of the early adopter/home theater enthusiast crowd."