DigiTimes added to the Xbox 360 rumors yesterday (April Fool’s Day), saying that they have a source who says “Lite-On IT is developing built-in Blu-ray Disc-(BD) ROM drives for the Microsoft Xbox 360 game console.”

Today they are sticking by that with another report saying that such an Xbox 360 BD would launch somewhat of a price war because (surprise) Microsoft would have to sell the system at a loss.  Yet again, Microsoft says they will “not comment on market rumors.”

I’ve been covering the Xbox 360 Blu-ray rumors longer than I’d like, and such an Xbox 360 still makes no sense.  The PS3 is likely to be a better Blu-ray Disc player for a cheaper price, Microsoft doesn’t need to loss money on Blu-ray when they have other issues like RROD to combat, and of course we have Microsoft saying that they are not in talks with the BDA to actually add Blu-ray playback to the Xbox 360.

The Blu-ray drive does nothing without Microsoft actively working with the BDA.  Remember, as Blu-ray is not standard on 18 million other Xbox 360s, game developments can’t take advantage of BD media for games.  Such an Xbox could only be used for Blu-ray Disc movies, again questioning why you would include it in a new SKU instead of a standalone drive that gives you a starting market of 18 million.  A standalone drive isn’t likely to ship many units and still not worth it considering the cost of an Xbox 360+Blu-ray Disc drive being more then a PS3 with Blu-ray integrated.

Even better through, Lite-On is questioning the DigiTimes reports. CED is reporting “Lite-On questioned the accuracy of the reports from Taiwan, its U.S. spokesman told Consumer Electronics Daily Tuesday.”  CED was also questioning the motive themselves, “why Microsoft now would consider Blu-ray playback as a built-in feature…”  Before anyone asks, no I don’t have a link to CED unless you're going to pay the $1,500/year subscription first.

Update: Xbox 360 Blu-ray Shot Down Again By Microsoft