Competition is what forced the price drops in the first place. I don't see Blu Ray players getting a whole lot cheaper than they are now for a long time. It is also what forced the good deals on movies even though it may not have been "good" for the consumers to have different formats it is what helped drive prices down faster.
There will be a cheap Chinese BD player announced at CES. Player prices will be down significantly by the summer of 08. You can bet on that. They are already hovering around the $300 and just below.