Microsoft has started designing a new-generation of Xbox 360"s equipped with an internal HD-DVD drive and is selecting manufacturers in Taiwan to build the drive, according to sources in Taiwan"s optical disc drive (ODD) industry.
Microsoft will offer an external HD-DVD drive for its Xbox 360 at around the end of this year, in an attempt to compete with the Sony PlayStation 3 (PS3), which will have a built-in Blu-ray Disc (BD) drive, the sources indicated. The external HD-DVD drive, however, can only play back movies, the sources noted. If the process of selecting partner makers and subsequent certification goes smoothly, Microsoft may launch the Xbox 360 equipped with the built-in HD-DVD drive in the first half of 2007 at the soonest, the sources noted.