Microsoft: Games sell consoles, not high-def discs

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Toshiba's decision to axe production of HD DVD drives is bound to have some effect on the consumer electronics industry, and one of the casualties will be Microsoft's external HD-DVD player add-on for its Xbox 360 video game console. Microsoft offered a reassurance to consumers and analysts in a carefully worded statement.

"We do not believe the recent reports about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace," reads a statement offered by a Microsoft spokesperson. "As we've long stated, we believe it is games that sell consoles and Xbox 360 continues to have the largest next-gen games library with the most exclusives and best selling games in the industry."

In all of its iterations, the Xbox 360 only utilizes a standard DVD drive for its internal optical disc mechanism. Microsoft also offered an HD-DVD drive for the Xbox 360, but only as an external, optional accessory. Microsoft recently reduced the price of the HD-DVD drive from $179.99 to $129.99.

Comparatively, Sony's PlayStation 3 features a built-in Blu-Ray Disc drive. Some analysts attribute this as one of several factors why Blu-Ray has picked up enough momentum to ultimately win this format war over rival format HD-DVD.

Microsoft's statement came shortly after rumors circulated that Toshiba would stop production of HD-DVD drives, and the company said it would "wait to hear from Toshiba before announcing any specific plans for the Xbox 360 HD DVD player."

"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," reads the Microsoft statement.

Microsoft also rents 720p-format movies for download through Xbox Live, the online service that comes with the Xbox 360. It's similar to Apple's iTunes Store, in that users download a digital movie, which they have a limited time to view before it expires.

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