Although Microsoft has denied its having negotiations with Sony or any other member of the Blu-ray Association, it's only be a matter of time before the Xbox 360 gets a Blu-ray player, be it external or internal. But it might happen much sooner than expected. According to industry sources quoted by DigiTimes
, Taiwanese manufacturer Lite-on is already working on the BD ROM drives that will be built-in a new generation of Xbox 360 consoles scheduled for launch sometime during the second half of this year.
When Lite-on was asked to comment they cited client confidentiality, but there a few points that make this unconfirmed news quite possible. First, Toshiba and the HD DVD promo group have officially thrown the towel, which makes Blu-ray the only HD option on the market. Microsoft keeps touting the Xbox 360 as not just a console but a entertainment center, so they have to go with Blu-ray if they want to compete with the PS3 at the same level. And second, Lite-on already manufactures DVD drives used in current Xbox 360s so this makes them the more ideal manufacturing partner.