With HD DVD Dead, Will Blu-ray Prices Begin to Fall?

With HD DVD officially dead (RIP February 19, 2008), cynics are beginning to wonder whether we're in for a long road of inflated Blu-ray equipment prices.

After all, Blu-ray began its life as the expensive high-def format and it remains so today, defying all expectations that consumers would naturally prefer the budget alternative format. But is it possible that Blu-ray prices might actually start to fall soon?

The conventional wisdom holds that Blu-ray no longer faces competition from HD DVD, so it will be better able to resist price pressure. Well, let's look at the facts: Months of HD DVD fire sales basically did nothing to trim Blu-ray prices so far. If the Blu-ray camp had been worried about being seen as too expensive, those price cuts should already have happened.

And besides, Blu-ray has never really competed with HD DVD.

Oh, sure, the two formats have struggled for dominance, but the real enemy has always been regular, standard-definition DVD. Executives have already been aiming their battle at the DVD world, where players can be had as cheaply as $30, so if price competition is really on Blu-ray developers' minds, we're going to have to see some far bigger cuts, far faster than we have before.

But most importantly by far, inter-format competition has historically been of little importance in price wars of the past. The original CD and DVD players cost thousands of dollars, but prices of both plummeted quickly as the technology to make them improved and overall sales have gone upward, even in the absence of a competing format. Without the distraction of HD DVD nibbling at its side, Blu-ray manufacturers should finally be able to focus on improving quality and decreasing prices instead of out-marketing and out-spending the competition on exclusive deals.

As well, with the format war over, more companies should now enter the market to produce Blu-ray gear and more consumers should sign up to buy said gear, further helping to depress prices as 2008 wears on.

The upshot is that, paradoxically, getting HD DVD out of the market could actually spur more innovation, increase production (as consumers finally get off the fence), and finally start pressuring down prices.

I could be wrong. This is a strange case where egos are involved, and Sony is so beat up by format wars of the past that it may be itching for a payoff this time around. Still, I'm still expecting big price cuts on Blu-ray for holiday 2008.