Facing tough competition from the more numerous and technically superior Blu Ray camp, Toshiba- the main promoter and supporter of the HD DVD format- decided to stick to the promotional prices applied in May to its entry-level players.

On May 20, Toshiba started offering an enticing rebate on select HD DVD player models, effectively slashing the price on the bottom line HD-A2 model to $299. During that same period, Amazon.com cut the price even further, to as low as $238 over Memorial Day weekend. The lower price shot up the player to be the top-selling DVD player on the site, while Costco was selling the Toshiba HD-D2 (same as the HD-A2) for $249 with a free HDMI cable.

However, since this was a limited offer only, it was abandoned at the end of June. But immediately after that, Blockbuster decided to favor only Blu Ray discs for the movies it sells across the US and Canada, thus inflicting a hard-to-bare hit to the HD DVD camp.

Toshiba declared during a press event in New York last week that promotional prices introduced in late May on its two lower-priced players would become permanent starting July 1.

The entry-level HD-A2 player will stay at $299, while the HD-A20 will cost $399. The high-end model HD-XA2 remains $799.

Speaking for the HD DVD Promotional Group, Universal Studios Home Entertainment executive VP of HD strategic marketing Ken Graffeo said they've found that price is the biggest motivating factor for consumers when it comes to buying a player.