IT Media was informed by Moore that the 360 will see a Blu-ray add on, similar the to the HD-DVD add-on, before Christmas. The drive will give 360 owners the power of viewing Blu-ray disc movies much like the PS3. No announcement was made on whether or not Blu-ray games will be playable, but given Microsoft's stance on HD-DVD games, playable Blu-ray titles are highly unlikely.
While great news for 360 owners(your HD library is going to be the largest out there - besides the few HD DVD + Blu-Ray player owners)
this is somewhat of a blow to the HD DVD camp, if true, but I wonder if it will have the same issues as the HD DVD player over the "Elite's" HDMI interface.
The HDMI standard cites the following:
All HD DVD players are required to decode linear (uncompressed) PCM, Dolby Digital AC-3, Dolby Digital EX, DTS, Dolby Digital Plus and Dolby TrueHD.
From what I understand the Elite is able to decode lossless audio but is unable to output LPCM and therefore either passes it as 2 channel pcm or dumbs it down to DD 5.1 640 Kbps.
The culprit appears to be an internal bottleneck which restricts bandwidth to HDMI.
IF, and I know it is a big if......Universal finally decides to back Blu-Ray, the war may be all but over.