[from GameSpy]

Although Microsoft has already chosen a side in the battle to set a high definition standard (deciding on Toshiba's HD-DVD format over Sony's Blu-Ray technology) for the next generation of movie and game discs, they realized that including an HD-DVD drive in their Xbox 360 console would prove far too costly for consumers. This led to a lot of speculation in recent months, and many people believed that it wouldn't be long before gamers saw a new version of the system that featured a built-in HD-DVD drive, leading to a lot of angry early adopters.

While that scenario hasn't been ruled out, Microsoft's Corporate Vice President, Worldwide Marketing and Publishing, Peter Moore, announced tonight that Xbox 360 owners will be able to get on the HD-DVD train by the end of the year. The company will be releasing an external HD-DVD drive, although the design, release date, and price are still a mystery. Analysts predict that the standalone unit will cost somewhere around $300, although that could change at any time.

After the presentation, there were some questions about whether the HD-DVD drive could be used for games as well as movies. Although that's certainly a possibility, it's likely that we'll only be seeing films produced for the standalone unit, as the cost of producing both DVD and HD-DVD versions of games might be too much for publishers to swallow. Plus, there's always the risk of alienating gamers, something Microsoft already risked by releasing two SKUs for the Xbox 360.

In addition to the HD-DVD news, Moore also revealed that Microsoft was enlisting the help of manufacturer Celestica to increase the number of available Xbox 360s. Moore predicated that Celestica, along with original partners Wistron and Flextronics, would help to greatly increase the output. That's undoubtedly good news to all of the people who weren't able to get their hands on the console this holiday season.