If, as previously reported, Microsoft adopts built-in Blu-ray Disc (BD)-ROM drives for a new version of its Xbox 360, sales prices are likely to be lower than the corresponding production costs since current OEM quotes for BD-ROM drives are as high as US$95-100, according to industry sources in Taiwan.

It is reported that Microsoft plans to offer a new Xbox 360 hardware revision equipped with a BD-ROM drive to compete with Sony's PlayStation 3. Taiwan-based Lite-On IT is said to have been invited to participate in designing the drive.

However, while the US$95-100 quoted for a BD-ROM drive is much higher than US$18-20 quoted for the DVD-ROM drives built into current Xbox 360s, the increase in retail price of the new consoles is unlikely to cover the whole of the OEM price gap, the sources analyzed, meaning Microsoft would be selling the consoles at a loss.

In addition, Sony, as a main global producer of BD-ROM pick-up heads, may decide to combat the market competition by selectively reducing the supply of key BD-ROM components to OEM makers partnering with Microsoft on the new Xbox 360 drives, the sources noted.

Microsoft responded in saying it does not comment on market rumours.

Story source: digitimes.com.