PRESS RELEASE

SAN DIEGO - July 26, 2007 - Today at Comic-Con International 2007, Microsoft Corp. announced it will lower the price of the popular Xbox 360(tm) HD DVD Player from $199 to $179 ERP (United States only) starting Aug. 1, 2007, and will add five free HD DVD movies for anyone purchasing an Xbox 360 HD DVD Player between Aug. 1 and Sept. 30. In addition, Microsoft further solidified the Xbox 360 as the ultimate high-definition (HD) entertainment platform, with key announcements around the HD DVD launches of "300" from Warner Bros. Home Entertainment Group and "Heroes: Season 1" from Universal Studios.


To promote the HD DVD versions of "300" and "Heroes: Season 1," Microsoft unveiled exclusive content for Xbox LIVE(R) Marketplace. Xbox LIVE will offer "300" on demand in HD starting Aug. 14, and is working with Warner Bros. at Comic-Con on a Bringing It Home campaign featuring "300" and other Warner Bros. properties. In advance of the street date for the "Heroes: Season 1" HD DVD boxed set, Xbox LIVE members will be able to download for free the show's pilot episode in high definition for a limited time. Members will also be able to download trailers, teaser scenes and other promotional materials highlighting the "Heroes: Season 1" boxed set on HD DVD.

Already the most affordable high-definition player available, the Xbox 360 HD DVD Player is the best solution for movie lovers seeking HD content in the highest possible resolution. The player's price reduction to $179 (U.S. ERP) continues to set the bar for value, making the Xbox 360 platform the most affordable solution for consumers seeking the broadest, most compelling selection of next-generation gaming and HD video experiences.

"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, corporate vice president of Global Marketing, Interactive Entertainment Business, Entertainment and Devices Division at Microsoft. "From the beginning, we set out to offer Xbox 360 owners an unrivaled high-definition experience, with a choice of optical discs on the HD DVD format and digital downloads through Xbox LIVE Marketplace - both of which have a selection of the best content Hollywood has to offer. Today's announcements around '300' and 'Heroes: Season 1' are great examples of how we believe HD content can be offered to consumers."

In addition to the price drop, Microsoft is extending Toshiba's highly successful "Perfect Offer" of five free HD DVD discs to Xbox 360 consumers. Previously exclusive to Toshiba HD DVD Players, with the purchase of an Xbox 360 HD DVD Player at the new low price of $179 ERP, consumers can choose five HD DVD titles for free from a selection of 15 popular titles through a mail-in offer. With a retail value of over $140 (U.S.), this promotion makes the Xbox 360 HD DVD Player one of the most compelling offerings for consumers looking to make the leap into HD this holiday season