Following its brief campaign to support the doomed HD DVD format, Microsoft has now apparently entered into talks with Sony to bring Blu-ray disc technology to the Xbox 360. That once-unthinkable scenario was outlined today in a report in the British economic daily the Financial Times, two months after Xbox group marketing manager Albert Penello reopened the door to the possibility.  Citing an unnamed “senior executive,” the Financial Times said that Sony and Microsoft are not simply discussing a successor to the Xbox 360’s now discontinued, dirt-cheap external HD DVD drive. The newspaper said that there is also the possibility of an internal Blu-ray drive being incorporated into a new, more expensive “premium” 360 model, as it is already in the PlayStation 3.

Thusly, Sony would earn royalties from sales of a rival console–a first for the game industry. For its part, Microsoft quickly denied any move toward Blu-ray had been officially made. “We have made no such announcement,” a rep told GameSpot. “Games are what are driving consumers to purchase game consoles, and we remain focused on providing the largest library of blockbuster games available.” For its part, Sony welcomes the possibility of a Blu-ray-equipped Xbox 360. “If Microsoft wants to release Gears of War 3 on a Blu-ray Disc, I think we can make that happen,” Sony Computer Entertainment America’s vice president of product marketing Scott A. Steinberg said.

Source: Gamespot