Shortly after Toshiba called it quits on the whole HD DVD thing earlier this year, the rumor mill ground up to full speed and started spitting out news of Microsoft's Blu-ray plans. As the rumors went, the people in Redmond were secretly working to replace the Xbox 360's ill-fated HD DVD add-on drive with one capable of playing Blu-ray discs. Eventually, though, Microsoft put those rumors to rest by repeatedly denying any such plans.
Well, guess what? The rumors are back. X-bit Labs now quotes "market sources" as saying Microsoft is indeed cooking up a Blu-ray drive for its console. Not only that, but the site says Microsoft has contracted Toshiba-Samsung Storage Technology (TSST) to manufacture the drive, and the firm is aiming to price the device in the $100-150 range. Sony charges $400 for its cheapest PlayStation 3, so if the 360 Blu-ray drive did launch at $100, you'd be able to get one and a regular Xbox 360 for the same price.
So, when can Xbox users expect to bask in the glory of a non-defunct high-definition disc format? X-bit labs suggests two possibilities: Microsoft may announce the drive soon in order to capture precious holiday-season sales from Sony, but it could also wait until the Consumer Electronics Show in January 2009 to "get the most attention." Considering Blu-ray movies still represent a small slice of the overall home-video pie, the second option doesn't sound implausible.