The need for healthy holiday sales in a bear market, competitive pressure from movie download services, and media speculation about the future success of the Blu-ray format itself has resulted in falling Blu-ray player prices across a range of current and older models, according to ABI Research. Tier 2 players and older models (6-9 months) are now widely available under $200. Amazon is offering a Samsung model bundled with four discs for that price. Holiday season prices may be in the $150-200 range. All of this runs counter to many of the industry?s original market forecasts and expectations.

"Blu-ray vendors and dealers are starting to realize that for Blu-ray to become the next DVD, they need to lower player prices in order to generate interest and build volumes," comments ABI Research principal analyst Steve Wilson.

"They are also getting more competition than they expected from download alternatives such as Xbox 360 and the Roku Netflix player, TiVo and Amazon. However downloads provide an opportunity as well as a threat: both LG and Samsung have concluded agreements with Netflix that allow some of their players to download movies and TV shows straight from Netflix. The more the Blu-ray players adopt these download capabilities, the better they will be able to differentiate themselves from standard DVD players."

Despite the low proces, Blu-ray sales are also expected to suffer in the fourth quarter, thanks to the shaky economy. Generally, economy dictates the level of investment companies will put into development and marketing, and perceptions of economic health are a critical factor in consumer purchase decisions. And the current economic slowdown could mean that consumers would be cautious in their spendings in the upcoming holiday season and especially for pricey Blu-ray players and discs.