Microsoft is in talks with Sony to bring the Japanese company's next generation Blu-Ray drive to its Xbox 360 game console.

The software giant had initially backed Toshiba's HD-DVD, which recently succumbed to a series of blows from the rival Blu-Ray camp and finally threw in the towel in mid-February. But with Sony's victory in the high-definition DVD format war, Stan Glasgow, Sony Electronics US president, said the two sides were now talking about Microsoft adopting Blu-ray.

It is not clear whether Microsoft would offer the drive inside of its game-console, much like Sony does in its Playstation 3, or whether it will offer the drive as an add-on as it did with HD-DVD in the past.

Glasgow also said talks are taking place with Apple, which has not offered Blu-ray drives on any of its computers and has focused on internet downloads and the streaming of content through devices such as its Apple TV.

Despite the hype, Sony does not believe its media would be overtaken by high-definition content becoming available on the internet given bandwidth limitations.

Downloading will build over time but this will be. . . years, he said.

On Blu-ray pricing, Mr Glasgow expects prices of players to drop as low as $299 by the end of the year. They currently cost $399 and higher. He feels the price of a player could fall to $200 by the end of 2009.

The prices of Blu-ray players are not expected to fall as precipitously as happened to regular DVD players.

Electronics Xbox Microsoft Apple