The reduction is effective in the United States, Canada, Australia and New Zealand, and units sold at the new price will continue to include the five free HD DVD offer out of the box. The player's functionality is strictly limited to the play of HD DVD and DVD discs. In early January, Warner Bros. abandoned HD DVD in favor of Blu-ray, sounding the death knell of the format with the loss of one of its greatest supporters.

The add-on, originally debuted in November of 2006 for $199.99, and dropped to $179.99 in July of 2007. Microsoft has since reaffirmed that the company would consider a Blu-ray add-on for the Xbox 360 if consumers continue to support the format over HD DVD.

Acclaimed director Michael Bay, meanwhile, maintains that Microsoft is intentionally sabotaging both Blu-ray and HD DVD.