Sony recently lowered the price of its upcoming HD Blu-ray player, to $499.00. Though Sony claimed that this was due to lower productions costs for Blu-ray related parts, it is clearly a response to Toshiba's $100.00 rebate, which appears to have injected a lot of life into HD-DVD player sales. In the first week, Toshiba experienced gains that were 5-10 times the sales rates prior to the rebate program.
Clearly, price matters in home electronics, which isn't a revolutionary concept. The fastest selling game console right now is the Wii, which just so happens to be the lowest-cost next generation console you can buy, as $250.00. Sony still sells stacks of PS2 devices at $129.00 a pop, a console that swims in a sea of games created by that consoles past success, all of which are compatible with the PS2 (not so much the PS3). As HD TVs have sunk well below the $1000.00 mark sales have improved dramatically (though Standard Definition sets are still far and away the most common).