"No. Lite-On is not manufacturing Blu-ray drives for Xbox 360. As we have stated, games are what are driving consumers to purchase game consoles and we remain focused on providing the largest library of blockbuster game available.

Microsoft: Lite-On NOT making Blu-ray drive [TechRadar]

The sources told DigiTimes that Xbox 360 Blu-ray drives manufactured by Lite-On would cost Microsoft $95-$100 a pop—a significant margin higher that their current DVD drives that run $18-$20. Especially with Sony in a unique position to limit supply of some Blu-ray drive components, this could mean that Microsoft's Xbox 360 would once again cost more to produce than Microsoft recouped in sales.

But if said scenarios is true, DigiTimes is overlooking on option in Microsoft's playbook.

Given that Microsoft has no qualms with different SKU pricepoints, a Blu-ray drive could easily be added to an Elite, or even an Elite Blue (or something) without altering Microsoft's bottom line on other models of 360. Of course, the Elite runs $450 and we can't believe that Microsoft would release a 360 with Blu-ray for more than a PlayStation 3. (Sure, maybe they would, but who really knows?) So could a $399 Elite be on the way with Blu-ray support? Dunno.

But no matter what, Microsoft has to be making more on their Elite than any other SKU they offer. Because that 120GB hard drive does not cost them $100 to make. And such profit margins would give them a little room to breathe with Blu-ray pricing.

Blu-ray Xbox 360s may sell at a loss, say Taiwan makers [DigiTimes via Maxconsole]