DigiTimes is reporting that Lite-On is developing Blu-ray Disc drives for the Xbox 360. According to their sources, Lite-On will begin BD-ROM drive shipments in the second half of 2008.
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.

Lite-On's shipments of the BD ROMs to Microsoft will start in the second half of 2008, the sources added. Lite-On is currently one of the suppliers of Xbox 360-use internal DVD-ROM drives.

Microsoft has decided to switch to BD for its Xbox 360 game consoles after Toshiba announced to discontinue HD DVD, the sources said. The BD-ROM drives that Lite-On is developing for Microsoft are for the next-generation Xbox 360 game consoles, the sources said.
While Microsoft has denied that they will offer support for Blu-ray, the continuous stream of rumors indicate that an addon player is probably coming in time for the holidays. If you'd like to read more, head on over to DigiTimes.