The moment Toshiba ditched HD DVD, the rumour mill was churning with reports that Microsoft was converting its Xbox 360 to Blu-ray. Microsoft denied every claim, though today, DigiTimes believes that the Xbox 360 may once again go Blu. Citing industry sources, the site says that Lite-On is developing built-in Blu-ray drives for the console. The site add that the drives are for the "next-generation" Xbox 360's, and Lite-On's Blu-Ray shipments to Microsoft will commence in the second half of this year.
The only detail given about the "next-generation" console was that the power supply will be cut-down from 210-watt to 170-watt. This will reduce manufacturing costs, and the size of the console.