Source: A recent story posted on popular gaming blog Kotaku.

　　What we heard: At the Electronic Entertainment Expo in May, Microsoft took the wraps off its external HD-DVD drive for the Xbox 360. Since then, the software behemoth has clarified several questions about the add-on. First up, it has said the drive will be for movie playback only, meaning that, for now, games on the next-gen HD-DVD format will be a far-off possibility.

　　Secondly, Microsoft has claimed that the combined cost of the 360 console and the HD-DVD drive will be less than that of the PlayStation 3, which sports an internal Blu-ray Disc drive. The PS3 comes in two models--a $499 20GB-hard-drive-equipped version with no HDMI video output and a souped-up, 60GB-hard-drive equipped edition, which goes for $599. By that calculus, Microsoft could sell the 360 HD-DVD drive for as much as $299 if it were using the $299 core Xbox as the "cheaper" benchmark--or as little as $199, were it to use the premium $399 360 as the point of reference. It could also go for as little as $99, were it to use the premium $399 360 and the bare bones PS3 as the point of reference.

　　Now, word has emerged out of Japan that the 360 HDD will be on the cheaper side. According to Kotaku, sources in Tokyo's Shibuya shopping district have learned that Microsoft will start selling the 360 HD-DVD add-on for around 20,000 yen on November 22. The price means that the add-on will likely go for around $199 in the US, given the exchange rate and previous pricing schemes for game consoles in Japan and the US.

　　The official story: "We have nothing to announce at this time."--Microsoft rep.

　　Bogus or not bogus?: [UPDATE] Not bogus. This has since been confirmed at Microsoft's pre-Tokyo Game Show press briefing.