DigiTimes reports that sources are indicating Microsoft is planning to launch a new version of the popular XBox 360 game console with an internal HD-DVD drive. This is surely in response to the pending launch of Sony's Playstation 3 console which will feature its own internal Blu-Ray drive. At this time, the only HD-DVD solution "officially" pending for the XBox 360 is the external drive option which will be released in the near future. The article does mention that the external drive can only play back movies, seeming to hint that the internal version will handle HD-DVD games. However, the business model for this approach seems tragically flawed as developers would certainly be coding games around the standard DVD format used by millions of current XBox360's. Granted, there might be some "extra" features offered on HD-DVD variants of the game. Just don't go expecting to see a step forward in visual quality as the time and effort required for such changes wouldn't likely be justified to the developer.