Microsoft News Tracker

Microsoft today provided a modest boost for two of its troubled initiatives when it lowered the US price of the add-on HD DVD player for the Xbox 360 from $199.99 to $179.99. Adding to the incentive, those who purchase between August 1 and September 30 will get 5 free HD DVD movies from a list of 15. Toshiba has been running the same 5 free movie promotion for some time on their line of standalone HD DVD players.

So how has HD DVD been doing lately in the battle with Blu-ray for the high definition DVD market? John Fortt summarizes:

The move comes as HD DVD seems to be losing critical ground at retail. Target (TGT) and Blockbuster (BBI) have said they will throw their weight behind the Blu-ray format, no doubt because it has the support of major studios and more high-definition movies are available for it.

But the format war isn’t over yet. A critical question is whether low-cost manufacturers in Asia will offer affordable HD DVD players this holiday season. The buzz in electronics circles is that if that happens, and if a big-box retailer like Wal-Mart (WMT) or Best Buy (BBY) carries the players, it could tip the scales in the high-definition format war.

When I spoke with Sony executives last month, they acknowledged that the price of Blu-ray players was not coming down as quickly as that of HD DVD, and that player pricing poses a significant challenge to the format.

I think the content availability will be more telling, but the format fight shows no signs of abating.