Unofficial industrial sources said that Microsoft Corp. will retail external HD DVD drive for Xbox 360 game console for approximately $199, which will make a set of Xbox 360 with premium bundle and the external drive as expensive as Sony’s premier PlayStation 3 offering.

According to a news-story filed by DigiTimes web-site, Microsoft will launch the add-on HD DVD drive for the Xbox 360 game console by Christmas for $200 (which is more than likely to transform into $199 when retailed). The drive will enable Xbox 360 owners to play high definition movies on HD DVDs, a standard that battles against Blu-ray for becoming the successor of DVD.

Even though for current Xbox 360 adopters $199 to play HD DVD movies is much less expensive compared to acquisition of Sony’s PlayStation 3 game console with Blu-ray disc playback capability, those customers, who do not own Microsoft’s latest game console, will have to think whether to get a premium version of Xbox 360 ($399) and the add-on HD DVD drive ($199) or the most powerful Sony PlayStation 3 ($599), as the price is going to be more or less equal.

Microsoft Corp., the world’s leading maker of software, showcased the Xbox 360 external HD DVD player at Entertainment Media Expo event. According to witnesses, the playback quality was similar to other HD DVD showcased during the day, meanwhile Microsoft promised that the add-on will be among “the least expensive” HD DVD player for Xbox 360 owners.

The drive will feature H.264 video decoder from ATI Technologies, who developed visual processing unit for the gaming machine. It is projected that the add-on drive will allow Xbox 360 to compete head-to-head with Sony’s PlayStation 3 which offers rival format Blu-ray playback.