Playing catch-up with a series of price drops on HD DVD players from Toshiba following Warner’s recent defection to the Blu-ray camp, Microsoft has shaved another $50 off its Xbox 360 HD DVD add-on which is now available for $129.99. On top of that, Microsoft is offering 5 free HD DVDs with any 360 external drive purchase, which essentially means you buy 5 HD DVD discs and you get the player for free.

The Xbox 360 HD DVD add-on may be cheap, but given the current state of the format war one has to wonder if it’s really worth investing $129.99 in a dying format. On the one hand, caching the tail end of HD DVDs life cycle may be a rather economic way to collect some HD movies that are still HD DVD-only, but there’s a good chance you’ll eventually have to shell out more money for a Blu-ray player to get your HD fix.