Xbox and Blu Ray...

Many of you will have noticed the rumblings across the net from the Digitimes article which stated that:

Lite-On IT is developing built-in Blu-ray Disc-(BD) ROM drives for the Microsoft Xbox 360 game console, according to industry sources. Lite-On declined to comment, citing client confidentiality.

This is patently untrue and has been denied by Microsoft themselves. However, stated within the same article:

The BD-ROM drives that Lite-On is developing for Microsoft are for the next-generation Xbox 360 game consoles, the sources said.

Power supply makers also revealed that while the present Xbox 360 uses a 210-watt power supply, the next-generation game console will use a 170-watt power supply in order to reduce production cost and the size of the device, according to the sources.

I believe that there has been a certain amount of confusion going on here. The sources clearly state that the Blu Ray shipments (which they believe have already begun) are for the next-generation Xbox. You don't call a product revision a new generation, full stop. Therefore this news is relating to the next Xbox console to be launched and, given the timeframe that it will probably be released within, then it isn't unlikely.
Looking at current console lifecycles, the next Xbox will probably be released around the mid-to-end of 2011 though this depends on how far on with development they are as it could even be the end of 2010 as it was originally released in 2005, so a 5-6 year life cycle is not that unusual for a console.

Now, though this news isn't unexpected it clashes with what my predictions were for a next-generation xbox (back on my old blog) so perhaps i'm way off on my predictions - though an intel Larrabee/quad-core solution is looking quite tasty with regards to power, scalability and cheapness.
Maybe i'm reading too much into this release of information but i'm surprised that no one else has picked up on these points.