[Update 11may05: Here’s another article that says the same thing. It says “Microsoft’s Xbox 360 is widely expected to use the HD-DVD format” which is news to me, because it’s actually widely expected to use DVD. But we’ll find out tomorrow, won’t we?]

All the industry sources so far have predicted that the Xbox 360 will include a DVD drive but will use advanced codecs (VC-1) so that HD content can be used.

But Video Business Online is hinting that the Xbox 360 may have an HD-DVD drive…

Sony is already planning to integrate Blu-ray into the Playstation 3, while Microsoft is expected to announce this week that HD DVD will be a non-exclusive component of the upcoming Xbox 360. Both next-gen gaming consoles will be used for DVD playback and home media networking.

I don’t know what is meant by a “non-exclusive” component. Maybe they mean optional? At any rate, I would put this rumour in the “very unlikely” category. The current thinking is that the Xbox 360 will be released in November – that’s just six months away. I don’t think that HD-DVD technologies can be made ready in time.

Link: Video Business Online (free subscription required) – Toshiba Improves its HD-DVD