Why is this post tagged KMART when it's WalMart and Best Buy with the deal?

lafond66

Where I live in Amarillo, TX, I went to 2 Walmarts and both of them had plenty in stock last Friday at around 11:00 p.m. I did see someone pick one up. I managed to convince my wife that this was simply too much of a great deal to pass up. She ultimately agreed and we bought one! Glad I did. The HD DVD movies look absolutely fantastic on my 46" LCD screen. Love it! Thanks to Gizmodo, I found out about this special Friday deal! I'm one happy customer!

funtasticguy

Wasn't the A1 a PC at heart? Didn't they have to do that (and charge a crapload) to get to market first? There's no way that the A2 or any other players cost nearly that much.

dingus

Sticking with the game plan?? I don't even know what you were trying to say. I'm still waiting this thing out they look the same to me but I'm not buying first generation tech or media. Who remembers DIVX the circut city format of DVD that was a flop from the begining and BEta alwasy had a rough time and the 8-track was slapped into alot of fords and hung around for a bit of time, so I"m willing to wait some time until the price comes down on the tvs and HD channel selection makes more sense. Then I'll choose.

Yeah I am kinda doubting it is a loss of 500 a piece, how much if sony losing on the PS3 then per unit??

Ultraorange

@ImTheKing: I agree in principal. The $100 HD-DVD players are a sign of desperation, as much as any loss-leader is. That said, it might just be enough to turn it around if these deals are more than just a Black Friday strategy. The unfortunate side effect of short-term low prices is that consumers are unwilling to pay as high a price in the future because the expectation has been set, and I can't imagine that they can lose that much for very long. I'm sure that those who get the $100 HD-DVD players are going to be happy with them though, and will use them until the Blu-Ray players are around $100 too.

I don't agree about the hard-drives though. I would have a few years ago when I swore that I'd never give up physical media for digital music. But I've made the switch and am happy to have a house uncluttered by CDs, even if it means I have triple backups of all my music.

weatherman

@ImTheKing: I agree mostly, but did you know your Blu-ray player doesn't support the full format yet? Check into profile 1 vs profile 1.1. That's one drawback of the pretty solid execution by Blu right now. I'm still pretty neutral.

Brian Lam

I got a A3 yesterday for $180+10 movies! $200+10% off coupon, 3 in the store 2 in the box and 5 in the mail. Genius marketing if you ask me. The DVD's cost the price to produce them, maybe $2 max. I'm sure their is some royalty crap but it's spread out over many different discs so I'm sure it isn't much. hd-dvd's are made with the same machines as dvd's so they really shouldn't cost more, but they do. Blu-ray discs are made with new machines that print the info layer on the other side and then they have to put a special hard coating on them because they would scratch otherwise.
Also, there isn't much difference between the A2 and A3. some say the A3 is worse because of audio codec support. It has only 1 USB port instead of the 2 on the A2 as well.
The A2's were just being cleared out for the new models and they wanted them to disappear. They weren't even available in my state.

fastm3driver

At this point Toshiba should consider is it time to call quits instead of losing $500 on every player and not even recou costs through movie sales as they give 5 free!

Yeebles

This is part of the reason that I have been siding with Blu-ray. Not because its a better technology, but because I feel that they are sticking with the program they have in mind and there are more companies backing them. Toshiba taking a big hit is good and bad, but more over I think its a sign of the desperate status of Toshiba with the HD-DVD product.

I have yet to really purchase heavily into either side, as I own approximately 30 Blu-Ray, but I definitely believe Blu-Ray will out weigh HD-DVD in the upcoming future.

As for everyones theory on Hard drives being the next big thing, I don't think that will happen for a very long time. I personally wouldn't trust a hard drive holding a movie collection. After working in video and seeing exactly what happens to hard drives, Ill stick to Psychical Media. Also keep in mind that Hard Drives have a life expectancy of around 5 to 10 years (what most companies have stated in their small font size 3 terms).

ImTheKing

Gotta be more than that because of the 5 free DVDs and at Best Buy got 2 more free. Yes, I am VERY happy with my purchase!

eFish

Maybe they need some good tax write offs? I don't really care because I got one of the HD-A2s for 100 bucks and it was well worth it to me.

oodanner

Looks like very old cost data to me... no way they are losing that much money. Regardless, I think this weekend was huge for HD-DVD. This is all about momentum going into the holidays. Unfortunately, Sony cannot hope to match on pricing and so they are swimming in a sea of retarded sexuality.

krugorg

When you have definitive proof they are losing ~$500 on each player, then we will talk. To say it's not plausible is not necessarily true, but considering they are currently the underdog by a significant margin, and an alleged payoff to Paramount and Dreamworks for $150 million, it would be hard to imagine them still afloat with these new practically irresistible deals, which is at max a Toshiba HD-A3 and 10 free movies for $200 at Best Buy (5 in rebate, 2 in box, 3 in store). It's definitely safe to agree on losing around $150-$200 per player, but Blu-Ray isn't scott-free on subsidizing costs. I'm pretty sure they too are losing a large sum of money to each player they sell as well.

ViewtifulJason

@evilsnowman: I agree with the Evilsnowman. Youg gotta remember that Walmart is one of (if not the) largest DVD retailers in the U.S. and they subsidize thier DVDs to bring in the millions of customers. I love blu-ray but this should have them sweating a bit...

russdogg

I wonder what Sony would have to sell the PS3 for if it actually intended to make a profit. As it stands now, Sony is losing boatloads on every PS3 sold...I'm guessing way more than Tosh is on their A2's.

zikky

@Brian Lam:

The HD-A1 is basically a 2.2GHz Pentium 4 PC with an HD DVD drive.

The HD-A2 at its heart is an NEC Emma3 SoC doing most of the grunt work and a 900MHz Celeron M mostly for HDi functions.

The HD-A3 is Emma3 but with an NEC MIPS CPU instead of the Celeron.

Wiseblood

So taking your opinions about this being a sign of desperation you could say Sony has been desperate since day 1 of the PS3's launch... See I can make stuff up too... What Toshiba is trying to do is carve out the "walmart" consumer... The people that don't like to spend a lot of money but want new things. This way they get their HD players into peoples homes at a low price, and than the family starts to buy the occasionaly HD DVD at 30+ bucks.

evilsnowman

Go Blue-Ray.......... I do hope they win.

zakeen

Wait a second.. $674 in parts alone according to iSuppli in 2006?

I'm sure NOTHING has changed in the past 1-2 years in terms of parts cost. I mean, electronic components NEVER get cheaper over time.

mmeister

@Wiseblood: Of course, but the tech is largely the same. How much cheaper can it be to make? 200? 300? 400? Still, they're losing money.

I really think we're only at the beginning, and with equal studio support, it's gonna be painful.

Brian Lam

I think everyone should also remember that HD-DVD is extremely popular in Europe. As for them losing money, after about a year, I'm sure manufacturing costs are down a whole lot, and I wouldn't be surprised if they're breaking even with the price drop.

SBM_from_LA

Obviously because every household that has an HD-DVD player is unlike to buy a Blu-Ray player, especially when they are more expensive. It's just another way to pay for "exclusive customers".

It's just like paying off studios. Is that desperation? I think not.

Besides, how many new HD-DVD owners do you think Toshiba got this week? Even I was trying to convince my brother to purchase one (even though I'd prefer both formats to die off & combine) since he still had yet to use his HDTV to the fullest extent (HD cable is shittily compressed).

Anyway, believe what you want to but it's a dog-eat-dog world out there. If you don't want to make consumer products cheaper, you'll be screwed (ala PS3 vs. Xbox 360 & Wii).

dagamer34

@weatherman: Yeah thats very true. It's a great marketing ploy to catch the consumers in their Black Friday frenzy. It could very well turn around, but from what all of the statistics I've seen say, I don't see HD-DVD actually pulling in for a win. I think it'll be that small boost that we see going back and forth between the two formats. Good analysis on that though.

ImTheKing

@Brian Lam: Yeah I hear you on that. Its such a dimly lit area still that its really hard to say what's going to pass and what's going to stay. I very well hope something happens soon although I highly doubt that will be the case. For now, I'll be holding off on the other 100 + movies i want to "repurchase" in high definition until there is a better feeling towards another from the community.

Either way, I most likely wont pickup the HD-DVD player only for the reason that I don't think it will be worth having in another 6 months. It's cheap but not that cheap.

ImTheKing

I would imagine that it was Wal-Mart and Best Buy that are losing money, and not toshiba so much. It would depend on how much toshiba sold the dvd players to walmart and best buy. I doubt they sold them for $99

Chaluapman

Losing money... Don't think so.
You can buy a flashlight for $1.00 but batteries will cost you $2.50

My first DVD player had a huge PC board full of chips and cables galore.
My current one has a single board with a single chip in a 3"x4" board and just a handfull of wires.

You'll be amazed athow fast they can redo a motherboard and chips to optimize the last $ out of it and turn it into profit.

You cannot sell the next generation HD-DVD unit if you are trailing behind legacy chips.

By discounting these units they are boasting the market share, expanding the standard and securing their profit on their next model.

Business 101

:)

aec007

You guys do realize that the A1 != the A2, right?

Wiseblood

@dagamer34:

I don't think it's obvious that every household with a HD-DVD player is unlikly buy a Blu-Ray player.

I think both camps may be in a race to establish market share for a long term stand-off. My first DVD player cost $800. I got the A2 for $100. If I can pick up a Blu-Ray player this holiday season for less than $200, I will. Aside from the aesthetics of having two physical players, this strategy will let me continue to avoid theaters and purchase whatever movie I want. For example, I would like to see Spider-Man 3, Ratatouille, and Tekkon Kinkreet on Blu-Ray this holiday season.

If this were actually to happen and studios lock in to long term deals on both sides, it will be interesting to see if the battle fronts migrate to special features, movie pricing, or something crazy like "Brand values" and celebrity endorsements.

"Have a HD-DVD and a smile"
"Blu-Ray: The choice of a new generation"

...So which format do I buy Planet Earth in?

finbled

Desperation, what?
People tend to forget Sony did the same for Blu-ray... or everyone just forgot how PS3 started selling with 200 hundred bucks loss from it's start?

I imagine if they put some gaming console with an obligatory HDDVD with it people will call it unfair competition now?

I'm not a particular fan of neither formats... I already said before: I'll just keep the one that releases the most cheap working recorder and most cheap media first.

Apart from that, it's competition. Blu-ray and Sony wants to beat that? Make the PS3 drop it's price without crippling the console.

Bokusatsu_Tenshi

Honestly, I see this as a last-ditch effort. I don't have a lot of faith that HD-DVD will be the prevailing winner, I am thinking the win will either go to BluRay or Combo. Once BluRay drops to an affordable level, the abundance of studios and the larger capacity of the media will be more of an issue to most comsumers.

Of course, as a recent purchaser of a $100 HD player, Im hoping the format will be around for a while, but I'm not going to sink a lot of coin into media until I am sure it will be a standard.

Lizard_King

why are the Blu-ray player makers so greedy and stupid?
they can make a sub $200.00 machine. just limit the technology,
just like what toshiba is doing.

tomaartist

Toshiba is trying to create (artificially) a holiday
shopping buzz, some what like the Wii, making a shortage
of the cheap players so the dumb consumer will buy the
more expensive one or make them scramble for the red
light special. RUN, RUN, RUN, RUN, RUN, RUN, RUN, RUN.

tomaartist

BLam...c'mon bro; labor is such a relative term

discounteggroll

I think the HD DVD camp understand who they are really competing against and it's not Blu ray. DVD is still King and only a price competitive alternative will stand a chance.
Us early adopter are suckers as Apple proved with the Iphone. Most people go to the store and make a quick cost to benefit analysis. If what they are getting is better than what they already have and won't cost them a fortune they buy it, game over.

gwolf

I worked for TAIS (Toshiba America Information Systems) for a while and I remember two similar fire sales:

First they slashed prices and sold their servers for dirt cheap... right before they quit making servers.

And second they slashed prices and sold their desktop computers for dirt cheap... right before they quit making desktop computers.

Unfortunately Toshiba never won too many battles with competitors. That's why my prediction is Blu Ray all the way.

CruJones

really? Crazy Eddie's? .. Wow...

gimpbully

Got mine for $80.. new let the MOVIES come!!

ZX3Junglist

My first DVD player was $300 in 1997, by your rational if I bought similarly equipped DVD player today for $35 dollars, then they are selling it at $265 loss. I doubt it.

The year old cost analysis you reference if not even the same player that was on sale at Wal-Mart for $99 bucks this past weekend. What a stupid post.

arkowi

People, Toshiba isn't losing a dime on this sale. These units have been on the shelves for a while and weren't selling - that's why they cut the prices.
It's the retailers who are losing money because they paid wholesale prices for these units and are now selling them below cost, which I believe was originally about $230 (I know someone on the inside...).

pete

Lets compare things... there's one company that makes HD DVD players (standalone) and sells them with losses to push their format.

And there's another company that makes Blu-ray players (multifunction device with video game capabilities) which is not only sold to customers with losses but was redesigned at least two times to remove essential functions from the device (such as backwards compatiblity or support for a disc format on the drive unit) to cut costs.

Now, tell me, who's got the fire sell going on?

retronaut

I got two of these at Walmart. My wife went to one store and I went to another. The store she went to honored the sale price (Apparently, they didn't get the memo). The store I went to said state law wouldn't allow them to sell advertised items below cost.

The fine print on the AD listed 4 or 5 states that may have a price different than advertised. I live in one of them. The Walmart I went to wanted $185 for these, supposedly this was their cost. They said that some manufactures such as Sanyo lowered their cost, at least in my state, so their products could be sold at the sale price. They said that Toshiba refused to do this.

It appears to me that Walmart is eating about $85 on each of these units. If the actual cost is higher than $185, I assume that Toshiba is eating it.

I was fortunate enough to get a screen shot from the Best Buy page and was able to talk Walmart into matching the price.

On an unrelated note, the $349 Acer laptops were selling for ~ $449 at my Walmart.

pcbxx

I estimated the costs in a post on AVS, using the service manual schematics (and my 30 years experience as an engineer) as a guide, and find that the apparent A2 build/box/ship cost is $150-300 with my best guess at about $200-250. Not counting the free discs which might "cost" anything.

But for SURE this isn't a $500 subsidy. Unlike the PS3 at launch.

kcmurphy88

Has anyone considered that maybe Toshiba is just liquidating old merchandise? They have newer better players out and these things arent sold on consignment. They got their money already when the items were shipped to the stores. The only people taking a hit would be the retailers.

gunzz

I picked up two of these at Walmart. My wife went to one store and I went to another. The store she went to honored the advertised price(apparently they didn't get the memo). The store that I went to said they couldn't honor the price. The fine print listed 4 or 5 states that said the price may be different. The store manager told us that state law wouldn't allow them to sell advertised items below cost. She said that some of the vendors, like Sanyo, lowered their price (at least in my state). She said that Toshiba refused. Supposedly their cost was $185 and that's what they were charging.

To make a long story short. A group of us got together and produced a screen shot of the Best Buy price and were able to talk her into matching it.

My guess based on this, is that Walmart ate about $85 on each of these units. If Toshiba's actual costs were higher than $185, I would assume that Toshiba ate the difference.

Also, the $349 Acer laptop was selling for ~$449 at my store.

pcbxx

This is no more desperation than the VERY lossy PS3 launch was. Toshiba is attempting to flood the market with HD DVD players, in the hope that the can sell enough to win the war. To do this they have to 1) have a few million standalone players ready to go; and 2) be willing to spend some hundred$ of million$. If you believe the $150 million Paramount bribe story, this shouldn't shock you in the least.

And remember, this isn't about Toshiba recouping something on later players, it's about 10 years of patent royalties. Even a billion, well-spent, is worth it to win.

All Blu can do is ride it out as the only thing they can compete with in quantity is the PS3. Historically, though, they have to sell 4 of those to match one stand alone.

kcmurphy88

The difference between the PS3 and an HD-DVD player being sold at a loss is that Sony makes up the difference with software sales(games) that are sold at a higher cost. How is Toshiba going to make up the loss?

misbarne