Next generation Xbox 360 with built-in Blu-ray coming in 2008?

Ok, here we go again. Despite Microsoft's attempt to quash Xbox 360 Blu-ray rumors, they're back... with a vengeance. According to "industry sources" speaking to DigiTimes, Lite-On is developing built-in Blu-ray Disc drives for the "next generation" Xbox 360 game console. Lite-On is expected to begin shipping the new BD players for assembly in the second half of 2008. DigiTimes also claims that the new, presumably smaller Xbox 360 will reduce the power supply from 210-watts to 170-watts. So... care to comment, Microsoft?

Update: As noted by our readers, Falcon-based 360s are already running at 175-watts.