A few weeks ago, Microsoft's corporate vice president of the Live, Software and Services Division, John Schappert declared that, following Toshiba's decision not to pursue the HD-DVD standard anymore, Microsoft would also drop the standard and not release any new generations of its HD-DVD add-on for the Xbox. According to Schappert, the add-on was hardly a success, with just a 3% of Xbox users buying the item.

The battle for the next generation optical disk has been going on for a few years now, with two different and incompatible standards emerging, the Blu-ray and the HD-DVD. In the consoles market, Microsoft, through its Xbox, was a HD-DVD supporter while Sony, through the PlayStation 3, offered its support to the Blu-ray. Microsoft offered the HD-DVD player as an add-on, while Sony had integrated the Blu-ray in its console, making it the primary data storage medium.

Recently, Toshiba bowed out of the fight and said it would discontinue development of the HD-DVD. And now, the Financial Times is reporting that Sony Electronics US president Stan Glasgow was in advanced talks to both Microsoft and Apple, to encourage them to incorporate Blu-ray drives in their products.

It is unlikely that Microsoft would ever integrate the Blu-ray in its console, as Sony has done, but it might just offer the drive as an add-on, to make the Xbox into a direct competitor of the PlayStation 3 when it comes to multimedia. Microsoft has not commented on a date for such a development. But it seems probable that Microsoft will wait until the prices of the Blu-ray drive fall. Analysts project that Blu-ray production licenses will soon reach the Chinese manufacturers and this move could take the price of the Blu-ray under the threshold of 300 dollars.