SlashGear

I’m taking this with a huge grain of salt, because Microsoft has denied that the Xbox 360 would ever receive an internal HD-DVD drive at least a hundred times. That having been said, New Launches is reporting that a revamped Xbox 360 with an internal HD-DVD drive is not only forthcoming, but should launch during the first half of 2007, just in time to provide more competition for Sony’s Blu-ray-equipped PS3.

Microsoft’s external HD-DVD drive is due to hit around Christmastime this year to give Xbox 360 owners the chance to enjoy high-definition DVDs on their Xboxes, but has repeated denied that the Xbox 360 would ever see an internal variant because it would eliminate choice for consumers over which high-def DVD technology to buy (Microsoft also said that, should Blu-ray become successful enough, there was a chance we’d see an external Blu-ray drive for the 360 too). Of course, there have also been rumors floating around about an HDMI-equipped Xbox 360, so is it possible that Microsoft has had a change of heart and plans to try and make the Xbox 360 as HD-ready as the PS3? Only time will tell.

[via New Launches]