Every $99 HD DVD Player Losing $500?

Gizmodo reports:

"You might have heard about those $99 HD DVD players that were being sold for a moment at Walmart and Best Buy. You're probably smart enough to realize that Toshiba isn't making much scratch on these things, but for reference, the first HD-A1 HD DVD player, cost Toshiba $674 in parts alone (Says iSuppli, 2006). So are they losing ~$500 bucks on these newer player selling for less than a C-note?

Within a calendar year, I very much doubt that it could have been price-optimized more than 30% (*number pulled out of thin air). Either way, it's pretty clear that Toshiba is losing at least a few hundred dollars on this $99 deal for consumers, and maybe over $500 bucks including all costs. Is this sale desperation? Or have they moved on from the early-adopter battle field and straight into the Waterloo of mainstream buyers? Maybe it's just a stunt, since most places sold out almost immediately. What better way to win the hearts and minds of cheap Americans than to hold an insane sale on a sliver of all of your inventory?"

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Real gamer 4 life4058d ago

Wow they going to go bankrupt.

LOL PS3 IS JUNK LOL4058d ago (Edited 4058d ago )

If the PS3 didn't have Blu-ray you guys would think this is a great sale. They will get their money back and a lot more once Blu-ray is shut out. Blu-junk costs $400+ a player! For $100??? Everyone is going to get in on this. Go ahead and hit that disagree button. I can't wait for when Sony loses another format war. PS3 owners are pathetic!

First Beta-Max, now Blu-Ray (or should I say Blu-Max)

Bonsai12144058d ago

i'm not sure if this applies only to game consoles, but isn't hardware usually sold at a loss and the difference is made up in software?

anyways, without a blu-ray player, the ps3 would have been priced much more competitively and probably would have much more ground on 360 as is

Kaneda4058d ago

No, they are not going bankrupt... M$ gave them the money...:) M$ wants Sony to DIEEEEE....

Danny Dan4058d ago

I actually thought about that once Bonsai... then I thought about all those hardware companies that aren't involved in software. SO yea, hardware needs to be profitable some way.

ravinash4058d ago

Now I'm backing Blueray, but even I can tell that the $500 amount loss seems a bit high. Have you ever known a company to spend that much on parts? Even a PS3 does not cost that much to produce.
I'm sure they are losing a lot of money on these $99 players, but not that much.

spec_ops_comm4058d ago

It's a DVD player with ingenious programming that allows it to read HD-DVDs. Therefore, I'm pretty sure the cost estimates are far higher than what Toshiba actually pays to produce them. PLUS those estimates are from 2006. Everyone knows how much technology can change/be optimized within a year.

Factor in the subsidizing by HD-DVD backing companies, and you have a near breakeven production line. Okay, they might still be losing a few dozen dollars, but they'll make that back if HD-DVD becomes the next universal media.

+ Show (3) more repliesLast reply 4058d ago
ATLRoAcH4058d ago

...funny picture its like a war map.Funny.

sonarus4058d ago

at this rate they might as well give it away free.

boodybandit4058d ago

That is an insane amount of money to lose per unit. Simply insane. What's the point and why so early into hi def DVD players?

PopEmUp4058d ago (Edited 4058d ago )

Talking about desperate, are they planning to be bankrupt? If they keep continuing spending this big and are not making profit out of it, bankruptcy is more likely the case

mccomber4058d ago (Edited 4058d ago )

or that it was a VERY temporary sale to get rid of inventory. But for the HDDVD camp, the free advertising and subsequent word of mouth that "HDDVD players are under $100!" is huge, even if they're basically impossible to find now.