After months of rumors and denials, the XBOX 360 with a Blu-ray disc drive is due to be manufactured soon and shipped in Q3 of 2008. Pegatron Technology, an OEM subsidiary of Asustek Computer, is reported to have received the winning order from Microsoft for a Blu-ray equipped XBOX 360.

Earlier reports cited Lite-On as the company with the privilege of building the new console for Microsoft. Lite-On is also currently one of the suppliers of the internal DVD drive fro the XBOX 360.

One of the strong points for Sony’s Playstation 3 has been the integrated Blu-ray player. The PS3 had the ability to draw both gamers and audio/video enthusiast, and this was proving to be a major advantage over its XBOX rival. It is estimated that 85% of Blu-ray players in use are PS3s. Microsoft chief executive Steve Ballmer had admitted that Microsoft had been working on support for Blu-ray under Windows during this year’s Mix08 conference. Rumors began to swirl and many began to expect Microsoft to announce a Blu-ray peripheral for the XBOX 360.

However, Microsoft came out and denied all rumors, stating that they were not exploring any kind of Blu-ray add-on or in talks with Sony about integrating Blu-ray into the XBOX experience. The software giant stated they would continue to invest in its XBOX Live online service as the means of high-definition content delivery. Toshiba received a crushing blow earlier this year at CES that Warner Brothers would be Blu-ray exclusive. This eventually led to Toshiba withdrawing from the HD format war and the demise of the XBOX 360’s HD-DVD add-on. It is interesting to note that sales of the XBOX 360 lagged behind Sony’s PS3 in the month of February, the same month Toshiba withdrew.

Many expected the death of HD-DVD would trigger a growth in Blu-ray hardware sales. However, to the dismay of the industry, acceptance and adoption of Blu-ray has been dismal.

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