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Sony, the Japanese electronics and entertainment group, is to launch a cut-price Blu-ray DVD player within the next few months as part of its strategy to outflank the rival HD-DVD format and kick-start the high definition DVD upgrade cycle.

The move highlights the battle under way between Sony and the backers of the Blu-ray format and the rival HD-DVD led by the Toshiba camp to ensure that their technology becomes the standard for next generation high-definition DVD content. At stake is a potentially huge upgrade market for next generation high definition DVD movies suitable for playback on the HD flat-panel displays.

Sony’s move was cheered by investors, sending its shares up 2 per cent to Y6,520 on Tuesday.

The new Sony player, dubbed the BDP-S300, will cost $599, but will have the same features and performance as Sony’s current Blu-ray player, the BDP-S1 which costs $999. It will compete more directly with HD-DVD players costing about $499.

Until now, the cheapest way for most consumers to obtain a Blu-ray player has been to purchase a $499 PlayStation 3 video game console, but these lack some of the features and ease of use of a stand-alone high definition DVD player.

Sony, which was forced to delay the launch of the PlayStation 3 in Europe until next month because of problems ramping up production Blu-ray laser components, has said it sold 1.8m PlayStation 3 units last year.

“Eighty per cent of people who buy a PS3 also buy Blu-ray movies to go with it,” Randy Waynick, senior vice-president of the home products division of Sony Electronics, said Monday.

He cited retail data from Nielsen VideoScan that showed Blu-ray discs outselling HD-DVDs by three to one this year.

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