Well, Microsoft is at it again: saying that games are what matters on the Xbox 360 and that it has no plans to introduce a new Xbox 360 with a Blu-ray drive. At this point it could be more of a tactical denial than anything else, as Microsoft needs to move current inventory prior to the launch of a Blu-ray console for the holiday season.

We don’t necessary agree with Microsoft’s strategy, but if you have inventory to move then you certainly don’t want to acknowledge rumors of something better in the pipeline that can negatively impact your existing inventory sales. Of course, this is understandable, but after speaking with our contacts and sources we strongly believe that Microsoft does, in fact, have a Blu-ray plan in place.

It would be foolish to think that they would not want to make sure that they are competitive with the PlayStation 3; and part of being competitive must include offering a Blu-ray drive. In the meantime, Microsoft is going to continue to say that they have nothing planned, but development will continue.

While the Blu-ray drive continues to be the story that everyone seems to be chasing we are more interested in the die shrinks and cost reduction measures that Microsoft is taking to make the console more competitive in order to engage in a slug fest this holiday season with Sony and Nintendo. Right now, we know that they are working on it, but beyond that everyone is tight lipped on what these changes might include.