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On Monday, Microsoft showed its HD DVD drive built for the Xbox 360 to members of the press.  According to News.com’s Greg Sandoval, the device is about the size of a hardcover book, and is set to hit stores in time for the holiday season.  Due to the limited selection of HD DVD titles, the Microsoft representative pulled up The Phantom of the Opera on the screen and demonstrated the playback and interactive menu features that can be displayed while a movie is still playing.

“All the audio and video processing is done inside the Xbox,” said Collins, 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 said.

Although pricing has not yet been released for the HD DVD drive, it is sure to be the cheapest on the market.  The Sony PlayStation 3 is expected to ship with a built-in Blu-ray drive.  Ready… Set… Let the gaming format war begin.

Check out News.com’s gallery from the event.

Read [News.com]