The Buzz: Shipments reported to begin in Q3 2008.

According to a report in the Chinese-language Economic Daily News (EDN) newspaper, translated by DigiTimes, Microsoft has made an order for Xbox 360 consoles equipped with Blu-ray drives with a shipment date of Q3 2008.

Pegatron Technology, a subsidiary of Asustek Computer, received the order from Microsoft and is expected to begin production of the new Blu-ray Xbox 360 console soon. If true the new console will be in stores in time for Holiday 2008.

With the Xbox 360 installed base approaching 20 million units worldwide don't expect a Blu-ray equipped Xbox 360 to use the higher capacity media for gaming. It will however enable new Xbox 360 owners to enjoy high definition movies on Blu-ray, a feature which has helped shift PS3s.