Slashdot has got the skinny on Steve Balmers beet-red face disclosing that the Xbox 360 and Games for Windows division of Microsoft have been working on implementing the Blu-Ray format. Quotage below.

"Microsoft chief executive Steve Ballmer had admitted that Microsoft had been working on support for Blu-ray under Windows during this year's Mix08 conference. Rumors began to swirl and many began to expect Microsoft to announce a Blu-ray peripheral for the Xbox 360. However, Microsoft came out and denied all rumors, stating that they were not exploring any kind of Blu-ray add-on or in talks with Sony about integrating Blu-ray into the Xbox experience. After months of rumors and denials, the Xbox 360 with Blu-Ray drive is due to be manufactured soon and shipped in Q3 of 2008. Pegatron Technology, an OEM subsidiary of Asustek Computer, is reported to have received the winning order from Microsoft for a Blu-ray equipped Xbox 360."

I'd like to now take the time to tell you all that Metal Gear Solid 4: Guns of the Patriots is now possible on the Xbox 360. Oh snap!