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Blu-ray Xbox 360 to be sold at a loss?

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Microsoft is on track to have sold 2m UK Xbox 360s by next week. But the company could be forced to sell Blu-ray models at a loss, if rumours about HD drive development are true.

Figures from market watcher Chart Track have forecast that since the console’s December 2005 UK release, Microsoft will have shifted around 2m units by 13 April. The PlayStation 3 (PS3), which launched here in March 2007, only just hit the 1m sales barrier in February.

Dorian Bloch, director of UK sales at Chart Track, said the Xbox 360 is extremely popular in the UK and that “Sony has a long way to go” before the PS3 overtakes Microsoft’s console.

Recent European price cuts to the entire Xbox 360 range have helped to boost the console's sales over the past few weeks. But Microsoft is bound to be searching for new ways to maintain the unit's popularity - and Blu-ray is thought to be the chosen path.

Yesterday Register Hardware reported that Microsoft was rumoured to have inked a deal with Taiwanese manufacturer Lite-On for manufacture of Blu-ray drives. It’s thought the drives will be integrated into a new Xbox 360 model, helping Microsoft compete with the Blu-ray enabled PS3.

However, a Taiwanese source has since told DigiTimes that each Blu-ray drive will cost Microsoft around $100 (£50/€75), while each existing Xbox 360 DVD-ROM drive is only thought to cost it around $20.

The source claimed that this price hike will force Microsoft to sell the console at a loss, because consumers will be unwilling to pay the premium for a Blu-ray Xbox 360 – which could see them turn to the PS3 instead.

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