CES: External HD DVD drive for Xbox 360

In mid-December Microsoft
stated,
"Microsoft, in both America and Japan, has not announced anything regarding the possibility of a next generation DVD drive being placed in the Xbox 360." It's true they never lied; the HD DVD drive won't be inside the Xbox 360,
it will be an external drive. During the CES Keynote, Microsoft's Peter Moore announced the device: "The new drive will offer millions of Xbox 360 owners the ability to easily enjoy HD DVD movies and will provide consumers with even more choices for experiencing high-definition content, in either physical or digital form."

It is notable that he specified "movies" and not gaming. As discussed earlier, if Microsoft offers two tiers of games, DVD9 and HD DVD, it could alienate the consumers who do not own the external drive and aggravate developers whose next-gen development budgets will be stretched as it is, without multiple console variations. This external drive is Microsoft's response to Sony's relentless Blu-Ray marketing, an effort to remove this contention from the next-gen purchasing decision. Will a low priced, next-generation DVD player really help sell consoles? Since Microsoft still has to ensure that HD DVD wins the console war, there are clearly plenty more battles left in this war.