Microsoft Corp. will drop the retail price of its add-on HD DVD drive for the Xbox 360 game console to $179 and include five free HD-DVD movies for a limited time, the company said Thursday.

The price will be $20 less than current prices starting on August 1st. Consumers who buy the drive between August 1 and September 30 will also receive the movies.

With the price reduction to $179, the Xbox 360 HD DVD player continues to be the most affordable way to enjoy high definition, said Jeff Bell, a corporate vice president of global marketing at Microsoft.

The move comes after Target said this week it would promote the rival Blu-ray format for high-definition DVDs this holiday season, following a similar move by rental giant Blockbuster.