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Rumor: HD-DVD Xbox 360 in the works, fully loaded

We've got a big, juicy Xbox rumor today, kiddies (one we've heard before, but juicy nonetheless). Smarthouse is reporting that Microsoft and Toshiba are teaming up to manufacture a new Xbox 360 with an internal HD-DVD drive. The new box would be aimed squarely at the entertainment market, and would include new "entertainment software" with functionality similar to Media Center. The article notes that the software wouldn't actually be Media Center, but a "spin off" instead. The machine also supposedly sports a host of other features including a dual HDTV tuner, large hard drive, wireless networking, and a docking port for an MP3 player. Added to this pile of speculation is the development of "a new open standard chassis system that allows an Xbox to be slotted into a HD TV screen over 40-inch." If we're reading that right, that means a TV with your Xbox 360 build right in.

All of this is apparently being done to combat Blu-Ray, which is being pushed by the Playstation 3. Frankly, it sounds a bit like overkill, but Smarthouse claims to have inside sources, including a Toshiba executive. The mysterious executive had this to say: "
An Xbox with a built in HD DVD drive is critical. They and we are working on it. It also has to be more than a gaming machine. Microsoft recognise this." The exec added that the device might be marketed as a Toshiba product as well as a Microsoft product.

We'll see.
Honestly, it doesn't make sense. HD-DVD might need a boost, but the 360 is doing just fine without it. We have to wonder about this Super Xbox, though. As something designed primarily to sell HD-DVD, how much will all these extra features cost? Assuming the rumor is correct, we'll find out in late 2008 or early 2009.

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