Wow, is it a day of the year, sorry, week... again? It must be time for some more rumour and speculation surrounding Microsoft and its potential adoption of Blu-ray for the Xbox 360, then. This time we have reports that electronics manufacturer Lite-On is developing an internal Blu-ray drive for the 360.

This information comes from unnamed 'industry sources', who also apparently confirmed to Digitimes that Lite-On will begin shipping the drives to Microsoft in the latter half of 2008.

The site also reports that power supply makers have said that the current 210 watt power supply of the 360 is being switched for a 170-watt alternative. The purpose, apparently, is "to reduce production cost and the size of the device". Again, the sources go unnamed.

Paul Jackson, Principal Analyst at Forrester Research, lent a bit of plausibility to the Blu-ray rumour, saying “I have no information on this, but it is entirely plausible. If one were to construct a rumour about who would be providing Blu-ray drives for 360, then Lite-On, as one of the major Blu-ray drive manufacturers, would of course be at the top of the list.”

That said, he doesn't expect anything official on the subject too soon. “Microsoft does not want to add anything to the package right now, it wants to keep the price point as low as possible at retail, so I doubt we will hear any official announcement about anything like this in the near future, or even at E3 [in July] as it might dampen demand for the current Xbox 360 offering.”

SPOnG has contacted Microsoft for comment, but none was available at the time of press.

For our part, we're sprinkling salt on this one. While it doesn't seem implausible that Microsoft will support Blu-ray at some point (although it has gone on record to say it won't) there would be little benefit to doing so with an internal drive. As Jackson points out, the company has gone to great pains recently to push the 360's price down and an internal Blu-ray drive would push it right back up. Microsoft would also be unable to use the HD format for games without isolating the millions of existing Xbox 360 owners.

The only advantage would be if it wanted to produce some kind of 'Xbox 360 Super Elite', but SPOnG sees a Blu-ray peripheral - along the same lines as the discontinued HD-DVD peripheral - as far more likely should Microsoft decide to support Blu-ray.

^{Sources: Digitimes, techradar}