The DVD format fight has echoes of the 1980s VHS-Betamax war

The BDP-S300 now costs $499 - half what the firm's first Blu-ray player cost at its launch six months ago.

Sony said growing demand for the next generation technology and falling production costs had allowed for the price cut.

Electronics company Toshiba sells its rival high-definition (HD) DVD player format for less than $300.

Both companies have struggled to win customers for their respective systems as the battle of the formats is causing confusion, according to analysts.

They believe customers will wait to see which one the market will settle for in an echo of the 1980s Betamax-VHS videotape battle.

Most sales of Blu-ray discs are for use on the Sony Playstation 3 console, which contains a Blu-ray player - although film purists say that they are not ideal for watching DVDs.

Format war

The introduction of two next-generation formats has split both the electronics industry and Hollywood film studios.

Players and discs for Toshiba's HD DVD and the Sony-led Blu-ray system went on sale last year. The two technologies are incompatible but offer similar features.

Both are able to store large amounts of data, important for high-definition images and high-fidelity audio, and both use a blue laser to read information.

Used in games consoles, the two formats offer detailed graphics and stunning sound on one disc.

Backers of Sony's Blu-ray discs include Samsung, Dell and Apple, while NEC, Sanyo and others have been pushing Toshiba's HD DVD.

In Hollywood, companies like Disney and 20th Century Fox have sided with Sony, while the supporters of HD DVD include Universal.

Earlier this year, South Korean firm LG announced it would build the first DVD player to play both rival high-definition DVD formats.

The player will be launched at the same time as a hybrid double-sided Blu-ray HD DVD disc, developed by Warner Bros, although no release dates have been given.