UPDATE: Amazon has ended its Microsoft Xbox 360 HD DVD drive for $79 promotion campaign.

Microsoft Corp. may lower the pricing of its add-on HD DVD drive for Xbox 360 game console to $79, as that is the price-point at which a big online store is selling the device now. The price slash would be logical for Microsoft, as manufacturer suggested retail price for a fully-fledged HD DVD player from Toshiba starts at $149.

Amazon.com currently sells Microsoft HD DVD drives for Xbox 360 video game console for $79.99, BestBuy lists the device for $119 and some stores found via Google also offer the device for below $100. Each HD DVD drive from the world’s largest software maker comes with several free HD DVD movies. Even though Microsoft’s official price of the product is still $129, the price-cut may be inevitable following Toshiba’s recent announcements and the fact that very few owners of the Xbox 360 have actually got the add-on.

Effective on January 13, 2008 the MSRP of the entry-model Toshiba HD-A3 with 1080i output (in fact, given that there is no difference between 1080i and 1080p source on modern HDTVs, the 1080i output is hardly important) is $149.99; the HD-A30, with 1080p output, is set to cost $199.99, and the higher-end Toshiba HD-A35 costs $299.99. All HD DVD players have Ethernet port, which allows connecting to the Internet and downloading or streaming additional content.

Given that standalone HD DVD players from Toshiba now begin at $149, end-users are less likely to buy an add-on HD DVD drive for a game console to watch movies for just $20 less.

Microsoft yet has to make official announcements regarding Xbox 360 HD DVD drive’s pricing.