Microsoft said it will stop making HD DVD drive add-ons for its Xbox 360 video game system after Toshiba ceded the high-definition video format battle to Sony's Blu-ray. The company has started selling the HD DVD drive for the bargain price of $49.99.

"HD DVD is one of the several ways we offer a high definition experience to consumers and we will continue to give consumers the choice to enjoy digital distribution of high definition movies and TV shows directly to their living room, along with playback of the DVD movies they already own," Blair Westlake, a corporate vice president of Microsoft's media and entertainment group, said in a written statement.

"As a result of recent decisions made by Toshiba, Hollywood studios, and retailers, Microsoft plans to withdraw from HD DVD. Xbox will no longer manufacture new HD DVD players for the Xbox 360, but we will continue to provide standard product and warranty support for all Xbox 360 HD DVD Players in the market," Microsoft Games Global Marketing team wrote on their Gamerscore Blog.

"As we stated earlier, we do not believe this decision will have any material impact on the Xbox 360 platform or our position in the marketplace. HD DVD is one of the several ways we offer a high definition experience to consumers and we will continue to give consumers the choice to enjoy digital distribution of high definition movies and TV shows directly to their living room, along with playback of the DVD movies they already own," the tean added.

Microsoft said it is looking at how the HD DVD technology it has developed, such as HDi, which adds interactive features to HD DVDs, and its VC-1 video encoding technology, can be applied to other platforms.
Microsoft said it would continue to provide standard warranty support for its HD DVD players. Toshiba estimated about 300,000 people own Microsoft’s $130 add-on for the Xbox 360.

No word on whether Microsoft plans on offering a Blu-ray add-on, or whether the company will incorporate a Blu-ray drive into future Xbox 360 models, as Blu-ray developer Sony has done with its PlayStation 3 console. Observers speculate Microsoft will do neither, focusing on delivering movies electronically through Xbox Live.

Story filed 27.02.08