It seems that our sources somewhat failed us on the news that Microsoft was dropping the HDMI cable from the latest Xbox 360 Elite package. While our sources were correct that Microsoft is, in fact, dropping the HDMI cable from the bundle, they will not be replacing it with a component HD cable after all.

In a surprise move, we have confirmed over the weekend that Microsoft will be dropping the HDMI cable and the component HD cables that they have previously distributed with Elite and Pro systems, only to replace it with a standard composite RCA cable with standard RCA-style left and right analog audio.

This move is sure to leave many scratching their heads, but as we have said previously, the move smells of cost cutting and nothing more. While it is sure to boost the sales of both the Microsoft-branded HDMI or HD component cable offerings, it will also open a window for third-party cable providers such as Monster or MadCatz, who offer lower-cost HDMI and component cable options.

Still, many will not buy the third-party compatible cables and will choose the higher-priced Microsoft-branded options, which will put more money in the Microsoft coffers. This news is surprising, as one of the most important features of the console is the HD resolution that will not be able to be achieved using a composite video cable.