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The company, which pioneered the high-definition video technology, said that it now expects to shift one million players this year, a 44 per cent reduction on the 1.8 million it had predicted.

Toshiba said last week that it intends to put HD DVD drives in all its laptops from 2008 in order to increase its public profile. Sony promotes the rival Blu-ray technology by installing drives in all its PlayStation 3 games consoles and there is some evidence that it has had a knock-on effect on disc sales.

But this was denied by, Ken Graffeo, executive vice president of Universal Studios Home Entertainment, which is unique among the major Hollywood studios in committing exclusively to HD DVD.

'Consumers who are buying Playstation 3 are buying it as a game

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console,' he said at the unveiling of new Toshiba players in Japan. 'They're simply not buying it for watching as many high-definition movies as Sony said they would.'

Ahead of Toshiba's gloomier forecast, the HD DVD Promotional Group said this week that the technology accounts for 60 per cent of the high-definition player market in North America. Recent price cuts by Toshiba took the credit, notably a $170 reduction in the price of the HD-A2. This HD DVD player is currently the top selling video player in any format at Amazon.com.

'Toshiba's latest promotional efforts are clearly resonating with consumers and showing that price is king when it comes to hardware,' said Craig Kornblau, chairman of the North American HD DVD Promotional Group. 'Behind the increase in sales for hardware and movies, you're seeing fundamentally lower manufacturing costs and ease of authoring for HD DVD. That's the type of model that can scale.'

Last week, Blu-ray.com said, but cited no evidence, that several new Blu-ray players and computer drives are in the offing from a number of manufacturers, including JVC, Philips, LG and Asus. New devices should increase competition and drive down prices. Indeed, Sony recently introduced its new S300 player for $100 less than expected, though it is still more than twice the price of the Toshiba A2.