Earlier this week, rumors began swirling that Toshiba was working in conjunction with Microsoft on an HD DVD-equipped Xbox 360 console that would also include 1080p video playback, wireless networking and other features. Not surprisingly, however, Toshiba was quick to quash those rumors by denying the company's involvement in such project:

"It's got nothing to do with us. But we know Microsoft doesn't want to include the HD DVD drive so as not to limit the user's experience."
Whilst there is an obvious attraction in having HD DVD integrated into Xbox 360 consoles, the game machine itself is unlikely to benefit from that, as games for the console would have to work on Xbox 360 consoles that only support typical DVDs. Still, with the falling prices of HD DVD hardware, the idea of having HD DVD-equipped Xbox 360s a couple of years down the road doesn't seem too farfetched.