Microsoft to launch $170 HD DVD player for Xbox 360

Posted by Wolfgang Gruener

Tokyo (Japan) - Microsoft will be offering an HD DVD upgrade for its Xbox 360 game console that will allow the company to compete with Sony in the HD arena. The new drive will be available on 17 November, the launch date of the Playstation 3.

The announcement, made at the Tokyo Game Show 2006, came as part of a strengthened marketing initiative for the Xbox 360 in a time when Sony and Nintendo are gearing up for the release of their next-gen game consoles. The price of the HD DVD drive, ¥19,800 or about $168, is well below previous estimates and increases the pricing pressure on Sony.

According to Microsoft, the new drive is 1080p capable, which puts the high-end and hard drive-equipped (20 GB) Xbox 360 in direct competition with the HDMI, 1080p capable PS3. However, the Xbox 360 system will be offered in a market dominated by the Playstation for around $480, while the comparable PS3 system with a 60 GB drive will retail for about $600. Pricing and availability for the HD DVD drive in the US have not been announced.

At least for users who already own an Xbox 360, the HD DVD addition may be the most economical way to watch HD DVD movies. According to data provided by Pricegrabber.com, Toshiba's HDA1 HD-DVD player currently sells for an average of $396 through etail stores. However, Toshiba's first generation HD DVD players are limited to 1080i capability and the already announced and soon to be shipped 1080p generation my cost as much as $1000 - which makes the Xbox 360 HD DVD system a true bargain, even if one has to buy the game console.

Sony appears to be still battling introduction problems of its next-generation game console, which the company described as one of its main four business pillars. The company recently announced that it will cut back the launch allocation of the console from two million to only 500,000 units worldwide. 400,000 consoles will be made available on 17 November in the U.S. and 100,000 devices will be shipped to Japanese retailers.