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If you’re the proud owner of an Xbox 360, things just got even more interesting. Later this year, Microsoft will release an external HD-DVD drive that’s compatible with the Xbox 360 console. Building on the momentum the Xbox has created for bringing high-definition games and entertainment to the living room, the HD-DVD drive is poised to take things a step further. 

The Xbox 360 external HD-DVD drive will feature USB 2.0 connectivity.

The new drive will offer millions of Xbox 360 owners the ability to easily enjoy HD-DVD movies while providing them with even more choices for experiencing high-definition content, in either physical or digital form. Specific details are currently scarce, but it is known that the drive will connect to the Xbox 360 via the console’s USB 2.0 port. It’s also unclear what kinds of content will be available in the new format. Universal Studios, Toshiba, and Microsoft are all throwing their weight behind HD-DVD so it’s a sure thing that movies will be coming to HD home theaters soon. What isn’t known is whether or not Microsoft and other game developers will begin developing Xbox 360 games that rely on HD-DVD media.And it’s impossible to talk about HD-DVD without mentioning Blu-Ray, the competing HD disc format that’s supported by Sony and other electronics and media behemoths. HD-DVD media supports up to 30 GB of storage space on a disc, while Blu-Ray supports quite a bit more: 50 GB. Meanwhile, HD-DVD media boasts lower production costs, and may offer a price advantage over Blu-Ray, at least in the near term. Both technologies rely on blue laser technology, which allows much more data be crammed onto a disc’s surface, thereby increasing storage capacity. It remains to be seen whether or not the competing formats will duke it out for supremacy in the post-DVD era, or if they will politely coexist. Some early battle lines have already been drawn; Sony’s upcoming PlayStation 3 console will include an internal Blu-Ray drive.

It’s safe to say, though, that HD-DVD will open up exciting new horizons for Xbox 360 owners who want to stay on the cutting edge of high-definition entertainment. Microsoft is betting the new external drive will be one more reason to join the Xbox 360 universe.