Microsoft Corp., the world’s largest maker of software and the developer of Xbox 360 game console, said during the E3 show in Los Angeles, California, that it would release an HD DVD drive for the Xbox 360 by holiday season. The drive will be external, but the company claims that it would be able to act as an HD DVD player when paired with the console.

Microsoft did not unveil many technical details concerning the player, but the pictures of it indicate that it would have mini-USB as well as two USB 2.0 connectors. Currently it is unclear whether Microsoft’s Xbox 360 supports high-bandwidth digital copyright protection (HDCP) technology, a compulsory feature for HD DVD movies playback. Besides, the company indicated that more than 50 new high-definition Xbox 360 games would be available by June 2006.

Microsoft also did not announce pricing of the external Xbox 360 HD DVD drive, but the combined value of Xbox 360 premium pack and the external HD DVD optical drive is unlikely to be higher compared to Sony’s PlayStation 3 version that can playback Blu-ray discs – $599. Moreover, Microsoft already said the Xbox 360 would be “affordable”.

“Stay tuned. We decided to save that good news for another day, but we're clearly out to make this an affordable option for Xbox 360 owners,” said Albert Penello, director of global marketing at Xbox division of Microsoft.

Microsoft said it would ship 10 million of Xbox 360 game consoles before rival Sony Corp. launches its highly-expected PlayStation 3 in mid-November.

Microsoft Xbox 360 console is based around microprocessor developed by IBM, high-definition visual processing unit designed by ATI Technologies, I/O controller engineered by SiS and some other key components. The gaming machine will provide a broad set of multimedia capabilities in addition to games. Depending on the bundle, Microsoft Xbox 360 costs $299 or $399.