Microsoft has revealed that Xbox 360 will be compatible with the Toshiba-based next-generation HD-DVD format - the main rival to Sony's Blu-ray disc format, which will be part of PlayStation 3 consoles from day one.
Speaking at the Consumer Electronics Show (CES) last night, chairman Bill Gates and Xbox executive Peter Moore said that an external HD-DVD drive would be made available before the end of 2006, although pricing wasn't discussed.
Indeed, relatively little was said, although Microsoft's Japanese Xbox chief Yoshihiro Maruyama has previously responded to speculation about an HD-DVD drive by saying that were such a thing to be released, "it will only be used for watching movies that run on next-generation DVDs".
The company also revealed that it had enlisted a new manufacturing partner, Celestica, to help cope with demand for the console - currently in production at Wistron and Flextronics facilities.
Despite demand outstripping supply, Microsoft expects to sell 4.5 to 5.5 million Xbox 360s by the end of June, when Moore predicts that 50 games will be available. Its previous estimate was that 2.75 to 3 million consoles would be out there within 90 days of launch.
The addition of the HD-DVD drive is symptomatic of Xbox 360's role in the propagation of high-definition entertainment, Moore said. He claimed that 90 per cent of owners either owned or intended to buy a high-definition TV in the next six months, and that 90 per cent of people polled who intended to buy cited Xbox 360 as their main reason for doing so. He also said that 10 per cent purchased an HDTV at the same time as their Xbox 360.
Moore also expressed satisfaction in the response to Xbox Live's greater integration, claiming that more than half of the console's owners were connecting to "the Xbox Live community", compared to one in ten on the original console - although he didn't specify how many were using paid-for Gold memberships to actually play games with each other.
He did reveal, however, that four million pieces of high-definition game, music and movie content had been downloaded since November 22nd, and that 60 per cent of Live members were using Microsoft Points to buy premium content.
Further to that, Bill Gates mentioned that Street Fighter II and a Texas Hold-'em poker game would be made available on Xbox Live Marketplace later this year.