Microsoft has announced that it's dropping the price of the already cheap HD DVD drive for the Xbox 360 from US$199 to $179 from the 1st of August in the US. On top of this, they're also adding five free HD DVD movies for anyone that buys the HD DVD drive between August and the end of September, although it's from a limited selection of 15 movies via a mail in offer.

Microsoft is also adding exclusive Xbox Live content for the HD DVD release of 300 and Heroes Season 1 on the Xbox Live Marketplace. The pilot episode of Heroes will be available for free download in HD for a limited time before the release of the HD DVD disc.

Let's just hope that Microsoft follows suite in the rest of the world and drops the price of the HD DVD drive for the rest of us. It's unlikely that the free movie offer will be extended outside the US though, as this is part of a scheme from the HD DVD consortium and other HD DVD consumer players feature the same offer.