Quote Originally Posted by Woochifer
Sounds like a rumor campaign to me. A similar thread was started up in the High Def Digest forum with a linked story, except that the story is more than a year old! I think a lot of rumors got started up when Gates said last year that they'd be open to making a Blu-ray add-on available if HD-DVD lost the format war. I can see an add-on getting introduced, but not an integrated drive.

It would be relative easy for MS to integrate a Blu-ray drive into the console, but such a move would make little sense for a number reasons. First, it would bump up the price on the Xbox360, thus negating the console's price advantage over the PS3. Maybe it would come with an upgraded version, but not standard issue on all versions.

Also, Xbox360 games get published on DVD media. PS3 games use Blu-ray media. If the Xbox360 suddenly began using Blu-ray discs for games, that would leave existing Xbox360 owners out in the cold -- won't happen.

In actuality, I think Microsoft was about to announce a Xbox360 with an integrated HD-DVD drive at CES (and might even have a bunch of them already sitting in a warehouse somewhere), but those plans got scrapped when Warner dropped HD-DVD.
From what I am hearing, they are having a bit of a struggle getting XBOX360 to work with a bluray drive. It seems that as powerful as the XBOX360 is, it does not do well trying to handle PCM, DTHD and Dts MA lossless and AVC serperately, or together. Its seems that AVC at high bit rates(what you would find on a Disney bluray titles) causes the processing to overload and shut down the machine. Using PCM, or any of the advance lossless codecs cause the audio to skip and jump around. The XBOX360 was optimized for games, not high resolution video sources. Its processing was designed for games, not high resolution audio and video, so getting it to function like the PS3 is proving very difficult for the designers to accomplish. Beef knows more about its gaming prowess than I do, but on the video side of things, it was not design to do what they are asking it to do apparently.