Sony's decision to use Blu-ray with its PS3 seems to be paying off despite the much higher retail price over its competitors. A recent Sony Brand Wave study carried out in five countries revealed that the Blu-ray player is a key reason that consumers buy a PS3. As Microsoft backs the rival HD DVD format, but its Xbox 360 does not feature an internal HD DVD drive, it is now trying hard to push the HD DVD format. To start off with, Microsoft will start bundling the Xbox 360 HD DVD add-on with a choice of five free HD DVD movies out of a selection of 13 movies.
Going by this Smarthouse report, insiders at Toshiba claim that Microsoft is working on a new Xbox model that will feature a built-in HD DVD drive. To help get Microsoft hardware into more living rooms for home entertainment, this Xbox will feature new entertainment software, a dual HD DVD tuner with EPG capability, a large hard disk and an MP3 player docking port. As Apple's iPod 17-pin docking port currently dominates the market, development is currently being carried out on an open standard docking port that will allow all manufacturers to use the same docking port.
According to a senior Toshiba executive discussion with Smarthouse, an Xbox with a built-in HD DVD drive is critical and that both Microsoft and Toshiba are working on it. This Xbox drive may also be sold under the Toshiba brand name. With Toshiba's long experience with building laptops and keeping them running cool, it is also working with Microsoft on ways of keeping both the noise and heat under control in the new entertainment Xbox. There have been reports of up to a 30% failure rate of the original Xbox 360 compared with under 2% failure rate for the PS3.
This upcoming entertainment Xbox 360 is predicted to be released either late 2008 or at the 2009 CES show in Las Vegas. So far, Microsoft has not made any comments about this Smarthouse report.

