Speculation about when or if Microsoft would drop prices on its Xbox 360 game console was rampant earlier this month, after Sony lowered its prices on the competing PlayStation 3.

Starting Aug. 1, Microsoft will drop the price of an Xbox 360 accessory: The HD DVD player will now cost $179, down $20, and come packaged with five free HD DVD movies during the month of August.

The announcement was made at the Comic-Con International convention in San Diego.

I'm in Redmond for Microsoft's Financial Analyst Meeting, which will feature presentations from Chairman Bill Gates, CEO Steve Ballmer, CFO Chris Liddell, COO Kevin Turner, division presidents Jeff Raikes, Robbie Bach and Kevin Johnson and other top executives.

Check back here throughout the day for updates from the event.