After Winning The DVD Format War, Blu-Ray Sales Tank

Blu-ray may have won the high-definition format war, but sales of its high-definition DVDs and players have tanked.

A report from ABI Research notes that it's been one quarter since HD DVD lost the high-definition format war to Blu-ray, and the market has absorbed the consequent impacts. HD DVD and universal players are selling at deep discounts and will no longer ship after 2008, but Blu-ray player and optical drive markets will need to undergo further evolution before reaching their full potential.

Consumer electronics manufacturers need to introduce full-featured players that sell around the $200 level. It will be 12 to 18 months before this market kicks into gear. Blu-ray packaged media also comes at a heavy premium over standard DVDs.

Optical disc drive manufacturers have lowered their prices for computer Blu-ray disc ROM (Read Only Memory) in efforts to kick-start adoption in the PC market, but Blu-ray drives that are priced three to four times higher than red laser drives and requiring an advanced graphics IC will struggle for support in entry-level products.

A day after ABI Research released their account, NDP Group presented their own report noting that standalone Blu-ray player unit sales dropped 40 percent from January to February, and only saw a 2 percent increase from February to March. HD DVD player unit sales dropped 13 percent from January to February, and as production stopped and inventories dried up, HD DVD players dropped down 65 percent from February to March.

When surveyed, an overwhelming number of consumers said they weren't investing in a new next-generation player because their old DVD player worked well and next-generation players were too expensive.

According to NPD's Retail Tracking Service, unit sales of up-converting players were up over 5 percent in the first quarter of 2008 compared to 2007, while sales of DVD players without an up-converting feature declined 39 percent.

It will be a while before consumers decide to go with the Blu-ray players. A few, such as myself, who preferred HD DVD players to Blu-ray are perfectly content watching regular DVDs.

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