The software maker also announced Wednesday it will launch the Xbox 360 in India this week and in Africa next week.
The rollout plans come as the company tries to shore up sales ahead of the arrival later this year of next-generation game machines by its two top rivals — Sony and Nintendo Co.
That anxiously awaited upgrade to the PlayStation line will have Sony's new Blu-ray player built in.
The attachment will cost 19,800 yen ($170) in Japan, bringing the combined cost of the basic Xbox 360 and the HD DVD player to nearly the same price as that anticipated for the PlayStation 3 in Japan.
In choosing Japan for the launch of the HD DVD add-on, Microsoft is testing a market that is one of the world's biggest but holds a deep allegiance for homegrown Sony.
Microsoft has plans to release the HD DVD add-on elsewhere, but no specifics about other markets or timing were disclosed.
Microsoft has been looking for ways to boost sluggish sales in Japan.
Earlier this month, the company's Japanese unit said it was set to release a cheaper, bare-bones version of the Xbox 360 to boost flagging sales ahead of the PlayStation 3 and Nintendo's new Wii system.
The low-end version, already sold as the Xbox 360 Core System in the United States and Europe, will be released Nov. 2 and priced at 29,800 yen ($256) — about 10,000 yen ($86.00) less than its standard version.
As of earlier this month, just 158,000 units of the Xbox 360 had been sold in Japan since its release late last year, according to Enterbrain Inc., a market researcher. About 5 million units have been sold worldwide in the same time period.
Microsoft also said there will be 110 game titles available for the Xbox 360 in Japan by year's end, addressing a common complaint by video fans who said PlayStation offered more choices.
Nintendo said last week its new Wii game console will arrive on schedule in the final quarter of the year, priced below both rivals, the XBox 360 and the PlayStation 3.
The launch of Sony's PlayStation 3, initially planned for earlier this year, has been postponed twice.
A decision to delay PlayStation 3 in Europe for four months until March was announced earlier this month.
The PlayStation 3 will hit stores in Japan on Nov. 11 and in the United States on Nov. 17, but Sony now expects to ship only 2 million units by year's end, instead of 4 million as originally planned.