Despite being repeatedly rebuffed in favor of digital distribution, the Xbox 360 Blu-ray console rumors just will not die. A report from Taiwanese news source Economic Daily News says that Pegatron Technology – an OEM subsidiary of Asus – has received an order from Microsoft to manufacture a Blu-ray equipped model of the Xbox 360.

Even though Steve Ballmer has said in the past that Microsoft will “support Blu-ray in ways that make sense,” we’re not holding our breath for a Blu-ray fitted 360 anymore given the company’s consistent denying of a replacement for the now defunct Xbox 360 HD DVD drive. That said, it’s also no secret that the embedded Blu-ray player is one of the major advantages the recouping PS3 console has now, so supporting the format would not only make sense for Microsoft but it could also be a crucial factor going into the holidays.