CrunchGear is reporting that an inside source at Microsoft who was a former member of the company's HD-DVD department has confirmed that the company will announce that the "Xbox 360 will get Blu-ray before Christmas" via a press release set to go out at 9 a.m. PDT. Details about the supposed system are slim, though the tipster confirmed that the new model will cost less than an Elite model ($449.99).
The announcement is supposed to drop one hour before the opening of the Worldwide Developer's Conference in order to steal the spotlight from Apple's annual event. Kind of a bizarre move on Microsoft's part -- we doubt announcing a new model of your gaming console will overshadow an entire conference-worth of Apple-related news stories. As per usual with rumors (especially ones involving Blu-ray 360s), we'll keep our standard level of skepticism at heart as we refresh our mailboxes tomorrow morning.