They never thought it could happen to them. The one, a widow, still haunted by the phantasmal caresses of his horrible murdered wife. The other, the vivacious child bride of her lover's widowmaker. In their secret bedroom fumblings, they would find the solace and bliss denied to each other: for one, power to go on; for the other, the fulfillment of that cruel, empty cavern in his chassis... a hole he never thought he could fill again. X-Box and Blu-Ray: A Love Story.
In short, X-Bit Labs is reporting that Microsoft not only plans on releasing an external Blu-Ray drive for the 360, but that it's already basically ready to go at a $100-$150 price point. Good news if true: Blu-Ray is one of the only real advantages the PS3 has over the 360, and a Blu-Ray drive could help even out the feature list... even if Microsoft has to swallow a bit of pride to do so.
Microsoft Preps External Blu-Ray Disc Optical Drive for Xbox 360 [X-Bit Labs via Crave]
Update: For their part, Microsoft is still denying the inclusion of Blu-ray in the 360. – Joel