It looks like Microsoft has changed their minds about the Xbox 360 supporting HD DVD. Microsoft's chairman, the infamous Bill Gates, announced that the company will be offering an external HD DVD drive for their new console.
Bill Gates had previously stated that HD-DVD could be supported by Xbox 360 at some point, leading to speculation that an updated version of the console itself, with a built-in HD-DVD drive, could be on the cards.
However, Microsoft said late last year that no such update was being planned - and now it seems that the firm has opted for an external drive instead, following to some degree in the footsteps of products like Sega's MegaCD and Nintendo's 64DD.
Little detail about the new drive has been revealed, but it remains likely that it will only be designed to play back HD-DVD movie content, and will not be used for videogames content, as Xbox Japan boss Yoshihiro Maruyama hinted last year. Releasing HD-DVD games would force users to buy the peripheral before they could play the titles.
I really don't see Microsoft putting a HD-DVD into the Xbox 360 quite yet. HD-DVD drives are still quite expensive and would increase the Xbox 360's already sizable price tag. If you'd like to read more, the entire article can be found here.