Microsoft has announced a free software upgrade giving the Xbox 360 games 1080p high-definition support – a feature Sony had hoped would give an edge to its rival, much delayed Playstation 3.

An HD-DVD drive, allowing the Xbox to read disks carrying high-definition games and movies, will be launched on November 17 – the day the PS3 is due to launch in the US, Microsoft announced at the Tokyo Games Show. The price will be Y19,600, or about £90.

The PS3 will not be launched in Europe until March, a delay that could have ramifications beyond the games industry. The console's high-definition drive uses Blu-ray technology, a rival to the HD-DVD format, so the outcome of the high-definition format war could be decided by how the two consoles fare in the market.

Microsoft also used the Tokyo show to announce announced a library of 110 high-definition games for the Xbox.