The report sounds shaky considering that manufacturers of Blu-ray drives for high-definition content, led by Sony (SNE), so far have had a hard time getting Blu-ray-only players down to the $400 mark. Combo players could only be more complicated and expensive to build. It seems to me that it might cost at least another $75 to add HD DVD capabilities to a Blu-ray box, considering components and software.

I’ll put it this way: If LG really does have a $400 combo box this Christmas, it’s a safe bet that Chinese manufacturers will have $99 HD DVD boxes in Wal-Mart (WMT). And if that happens, the format war will definitely get kicked up a notch.

UPDATE: CNET reports that Samsung’s combo player, due in Q4, will cost $1,050.