Blu-Ray drive for the Xbox 360 still in the works

The word out of Digi Times today is that the Taiwanese manufacturerLite-On landed a contract to supply Microsoft with Blu-Ray disc drives to be used in the Xbox 360 product line and the first major shipment is to be in late 2008. Microsoft is currently not commenting on it but I am inclined to believe it for a number of reasons.

This is quite believable to me since Lite-On are already a supplier of optical disc drives to the Xbox 360 and Microsoft has always kept their options open technically and politically regarding bringing a Blu-Ray player to the Xbox 360. There are some media outlets that are going to far as to conclude that there is going to be an internal Blu-Ray drive in a future Xbox 360 and I am not likely to believe that as much as I believe that there is an external Blu-Ray player in the works.

Here are the main reasons why I think the eventual Blu-Ray player for the Xbox 360 is going to be external. The Jasper Xbox 360 motherboard is already well in the testing phase and they are putting on the final touches before ramping up manufacturing. I don't see the timing working out for it to be internal.

An internal Blu-ray drive would dramatically increase the cost of the Xbox 360 system and Microsoft is working hard to make the cost of the hardware as low as possible to reach a wide market. The phenomenal success of the Wii has them spooked and they want the cost of the Xbox 360 systems to go down as low as possible. They have never done a complete separate motherboard design and they would need to have extra hardware for Blu-Ray playback. Technically there is no difference between the Xbox 360 Arcade and the Xbox 360 Elite once you take all the external accessories off it. They made money off every external HD-DVD player sold and that business model would work out perfectly for a Blu-ray player. The cost of the a Blu-Ray drive is about $80 more than a DVD drive and I think it would be extremely unlikely that they would want to increase the cost of the 360. However an external Blu-Ray drive priced the same as a HD-DVD drive before the clearance would work great.

I do know that here are several external accessories are in the works for the Xbox line and external accessories has been a very monetarily successful market for Microsoft. A external Blu-ray drive would mean a new accessory on the store shelves in time for the holiday shopping season 2008. They already have millions of existing Xbox 360 in the hands of paying customers and I think there is a greater market opportunity for an external product. I have not had much faith in the past declarations that movies over Xbox Live marketplace were going to be the only option for movies on the Xbox. There is just not the bandwidth, storage space or content licensing opportunities for that to be a viable alternative to movies on an optical disc.

I also don't think Sony is going to go out of their way to prevent this since they are not the only company in the Blu-Ray group and they have a lot to gain if their competitors over at Microsoft started to use the movie disc format that they risked the Playstation brand to promote. Blu-Ray is a huge risk for Sony and they want EVERYBODY to use it, even Xbox owners.

I am about 95% certain that we will see an external Blu-Ray player for the Xbox 360 before Christmas 2008. We will never ever see Xbox games on a Blu-Ray disc format and Microsoft has been very clear about that. Microsoft does not want fans to choose a PlayStation 3 over an Xbox 360 just to get a Blu-Ray player. By offering an external Blu-Ray accessory there would have an alternative on the market when Joe Blow consumer eventually wants to get a Blu-Ray player this Winter.

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