HD DVD internal drive
The official next-generation optical format, HD DVD, is due to be launched later this year as a Xbox 360 accessory. The drive will attach to the console via a USB cable and will provide video resolutions of up to six times the resolution of current DVDs and superior digital multi-channel, surround sound effects.
Although Microsoft have said that the drive will be external, indeed they have previously stated that a change to the Xbox 360 hardware may confuse consumers, Toshiba appear confident that the accessory will be built into the console at some point in the future.Toshiba Australia general manager Mark Whittard told IT Wire, "I would imagine that there are plans in place to put an HD DVD drive internally in future revisions of the product. They're not speaking about it publicly at the moment but I would expect them to do that and fairly soon."
HD DVD is supported by many leading studios including Warner Brothers and Universal. It's estimated there will be 150-200 HD DVD titles by the end of this year.
UPDATE : From Microsoft: "At E3 we showcased our Xbox 360 HD DVD player that is an external drive. Since launching Xbox we have retained a games first emphasis, but we also offer consumers the ability to build on our powerful platform, such as in combination with a Windows Media Center Edition PC. We feel that offering the drive externally is the best way to give consumers the ultimate choice to create their own high definition experiences. We have no plans to release the Xbox 360 with an internal HD DVD drive."