Microsoft Matches Sony Price Cut... In Format Wars

Earlier this month, Sony slashed the price of its Playstation 3, partly to boost console sales, but also to give them an edge in the format wars: HD-DVD vs. Blu-ray. Microsoft matched them today, cutting the price of the Xbox 360 HD-DVD peripheral to $179, plus a bundle of movies.

A mass market for high-definition video is still some way off, due in part to the high price of the devices. Blu-ray and HD DVD are battling for domination in a war reminiscent of the VHS-Betamax battle of the 1970s and 1980s. That war was won by VHS after about a decade.

Rival Sony cut the price of its PS3 game console earlier this month to ignite demand. Sony and Microsoft are in a three-way battle with Nintendo Co. Ltd.(7974.OS) for control of a $30 billion video game market.

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