Microsoft recently demonstrated its external HD-DVD drive for Xbox 360 at the DVD Forum in Los Angeles, and announced that it will be available to put on your “wish list” for the holidays.

This sexy “little-silver-black-box” which is about the size of that good book you were reading on vacation, should be among the cheapest solutions of HD-DVD players, with a price tag rumored to be 200$ in the US, which would mean between about 200-250 Euros when it gets to us in Europe.

“All the audio and video processing is done inside the Xbox,” said Kevin Collins, senior program manager at Microsoft, who noted that research has shown that a majority of Xbox owners already own high-definition displays. “An Xbox drive provides them with all the other equipment they need to watch HD DVD movies”, he added. “This gives consumers choice and keeps their cost down.”

From what we understand, picture quality was considered equal to most HD-DVD drives demonstrated at the event, but we’ll need to get more information on the future possibility of DVI and/or HDMI outputs. Remember, the Sony PS3 offers HDMI v1.3.

Worldwide availability of Sony’s PlayStation 3 is expected in mid-November (November 11 in Japan and 17th in the US), for year-end shopping too, with the Blu-ray drive built in. Sony plans to ship 2 million units for the launch and the holidays (2006), while in a recent interview Kaz Hirai, Sony Computer Entertainmant President, said that production has not yet started, but “Everything’s pretty much on track”. See the full interview with GameSpot, HERE.

Inside-Outside, a contrast in strategy between the two titans. It’s the consumer who will decide! As highlighted in the interview above, the debate is hot on who will win out.

And to make forcecasting even more uncertain, as the battle of the formats rages, although opinions vary some analysts feel that the video games market may provide critical to winning that war…