At CES, Microsoft's Corporate Vice President of Interactive Entertainment Business, Peter Moore, commented that the Xbox 360 could eventually support the Blu-ray format. Microsoft has now reaffirming their committment to HD DVD, stating that they have no plans to support other optical formats.
Last week we reported that Microsoft would leave open the possibility that its next-gen console could one day support Blu-ray if that format ended up winning the war against HD DVD. This was based upon comments made by Microsoft's Corporate Vice President of Interactive Entertainment Business Peter Moore to Japanese website ITmedia during CES.

However, Moore's comments, which made the rounds not long after MS announced plans for an external HD DVD drive for the Xbox 360, were taken out of context, the company insists. To clear up any confusion, MS has issued a statement to the effect that they are 100 percent behind Toshiba's HD DVD format.
Microsoft would be smart to release both HD DVD and Blu-ray drives and let consumers decide which is best. Then again, that's not really the Microsoft way. If you'd like to read more, the entire article can be found here.