The rumor mill was abuzz last week with news that Microsoft was in covert talks with Sony over the introduction of a Blu-ray drive for the Xbox 360. The rumor was sparked by the Financial Times, and it suggested Microsoft had finally bitten the bullet and intended to replace the console's now-defunct HD DVD drive accessory.
In a statement to Reuters, however, Microsoft has denied that any such talks are taking place. The news agency quotes Xbox 360 Group Product Manager Aaron Greenberg as saying plainly, "Xbox is not currently in talks with Sony or the Blu-ray Association to integrate Blu-ray into the Xbox experience." Greenberg went on to say that Microsoft plans to "continue to invest" in its Xbox Live service, which allows users to rent movies (some in high definition) through the Internet. He added, "We're the only console offering digital distribution of entertainment content," suggesting a Blu-ray accessory may not be necessary for the console's success.
On another note, Greenberg told Reuters that he expects Xbox 360 shipments to trail those of the PlayStation 3 for February—the second month in a row, the news agency comments. Microsoft expects inventory to become "healthy" again next month, though. (Thanks to Shacknews for the tip.)