With the news of XBox 360 will get a 1080p dashboard update, do u think that it would be more difficult for Sony to justify PS3' price.

Yesterday we reported on Microsoft's HD DVD plans (in Japan) and the somewhat surprising news that with the fall software update the Xbox 360 will be 1080p capable.

Many industry observers have viewed these moves by Microsoft simply as "me too" announcements. Sony has invested a lot in the PlayStation 3 and Blu-ray, and you can bet their marketing team will soon be emphasizing the Blu-ray functionality and 1080p output. Microsoft surely doesn't want to be buried by all this talk, and so they can now claim to have a high-definition movie player and 1080p output as well-at least that seems to be the general thinking.

So what is Sony's reaction to this latest Microsoft news? Brian Crecente of the popular Kotaku blog heard from Dave Karraker, senior director for corporate communications at Sony Computer Entertainment America, who harped on the fact that the HD DVD player won't improve the gaming experience on the 360 (MS still insists it won't be used for games).

"It's unfortunate that Microsoft's external HD-DVD drive will not enhance the experience at all for the gamer," said Karraker. "Sony realizes that to truly take gaming into the next generation requires a larger data format for both games and movies. PS3 uses the Blu-ray format for gaming, giving developers 50 GB of high-definition storage on a single disc, while Microsoft's 9 GB DVD gaming format is an obstacle for storing HD content."

As for Microsoft's 1080p announcement, Karraker noted that the software update still doesn't enable true HD on the Xbox 360. "Furthermore, Microsoft's announced HD games patch is really just a compatibility feature -- upscaling lower-resolution content does not make it Full HD (1080p), something that PS3 can do out of the box," he said.

[UPDATE] After getting word of Sony's comments Microsoft told GameDaily BIZ that contrary to the SCEA statement, "The facts are that with this software update, video and game content developed for 1080p will be output at 1080p -- native, not upscaled. Only content developed for lower resolutions will be upscaled."

XBox360 has a fake 1080p, its not a true 1080p HD. All the XBox360 does is Upscaling, meaning... a 720 signal will be widen and fits into a 1080p. Thus the quality isnt that impressive.

After getting word of Sony's comments Microsoft told GameDaily BIZ that contrary to the SCEA statement, "The facts are that with this software update, video and game content developed for 1080p will be output at 1080p -- native, not upscaled. Only content developed for lower resolutions will be upscaled."