Rumors of Blu-Ray Xbox 360s Persist

According to the Chinese language Economic Daily News, Asus subsidiary Pegatron has won a deal to build Xbox 360 consoles with a built-in Blu-ray player.

Microsoft’s official line on adding Blu-ray capabilities to its Xbox 360 gaming console remains unchanged and succinct: no. However, the Chinese-language Economic Daily News reports that Asus subsidiary Pegatron has been contracted by Microsoft to assemble Xbox 360 systems equipped with a Blu-ray drive. According to the report, shipments are expected to begin in the third quarter of 2008, which would have the units landing in retail markets just in time for the end-of-year holiday buying season.

The news is just the latest installment on the Blu-ray and Xbox 360 saga: Microsoft was one of the heavy-hitters backing HD DVD technology, and launched a separate HD DVD drive for the Xbox 360 console. However, when Toshiba officially threw in the towel on the HD DVD format earlier this year, speculation quickly centered on when, not if, Microsoft would add Blu-ray capability to its gaming console. Reports have had Lite-On developing BD-ROM drives for the Xbox 360, and some sources claim the relatively high cost of Blu-ray drives may have Microsoft selling Blu-ray equipped Xbox 360s at a loss.

For its part, Microsoft has consistently said it has no plans to offer Blu-ray capability for the Xbox 360, and is instead focussing on broadband delivery of high-definition video for folks who want to watch movies and other content via the Xbox 3690 consoles. Some industry watchers believe Microsoft is more likely to offer a Blu-ray drive as an external peripheral—as it did with HD DVD—rather than integrate a Blu-ray drive directly into the Xbox 360 console.