Following the death of HD DVD and Microsoft's decision to discontinue offering the HD DVD add-on for the Xbox 360, we first heard from Microsoft CEO Steve Ballmer that we would see some sort of Xbox 360/Blu-ray integration sometime this year.
This statement from Microsoft's guy-who-should-know was quickly deemed a misinterpretation by the Xbox product manager, Aaron Greenberg, who said days after the Ballmer statement that Microsoft is "not currently in talks with Sony or the Blu-ray Association to integrate Blu-ray into the Xbox experience".
Days after Greenberg quashed the Ballmer rumor, another Microsoft exec, Chris Lewis said that Xbox 360 users prefer digital downloads over any type of physical media storage device and with increasing broadband proliferation we would never see a Blu-ray player comingling with an Xbox 360.
Most of the back-and-forth has come from within the backrooms of Microsoft so far, but independent industry sources have now said that Japanese manufacturer Lite-On is currently producing BD-ROM drives for the next-generation of Xbox 360 consoles.
That would mean two things we didn't know before-there'll be a next-gen Xbox 360 and it looks like it'll have an integrated Blu-ray player. Lite-On will begin shipping the BD-ROM's in the second half of 2008 meaning we could see a new Xbox 360 release as early as 2009.
The next-gen Xbox 360 is also rumored to be smaller than the current edition console thanks to a reduction in its power supply from 210W to 170W.
The reduction in power should also reduce production costs, which hopefully will filter down to the final buyer (read: us) resulting in lower consumer prices.
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