Earlier this week, DigiTimes reported that Lite-On was developing a Blu-ray drive for the Xbox 360. Microsoft has denied this rumor, stating that the company is currently focusing on providing games and that those looking for HD content can get it through the Xbox Live Marketplace.
“No. Lite-On is not manufacturing Blu-ray drives for Xbox 360. As we have stated, games are what are driving consumers to purchase game consoles, and we remain focused on providing the largest library of blockbuster games available."

“For our customers who want a premium movie experience we offer the largest library of on-demand HD content available, and the ability to play back DVDs in high definition.“
While I think there is some truth to these rumors, Microsoft isn't going to announce support for Blu-ray until they are good and ready. If you'd like to read more, the entire article can be found here.