"While there was some speculation of the Xbox 360 supporting the Blu-ray HD format, Microsoft's Aaron Greenberg has put that idea to rest. He says that Microsoft is not currently in talks with Sony about integrating Blu-ray into the system. Nor are there any SKUs for Xbox 360s with Blu-ray in the works. So there you have it. From Greenberg's mouth to our ears, there's no Blu-ray in the future of the Xbox 360."
When is Microsoft going to realize it needs blu-ray to compete with the PS3? Do they not notice that the PS3 is selling better now?