Future versions of Xbox 360 may include HD-DVD

Bill Gates has confirmed that the company is thinking about future revisions of the Xbox 360 hardware already, and may incorporate a HD-DVD drive into the console at some point down the line.

Speaking at a joint event with HD-DVD creator Toshiba in Tokyo, Gates reaffirmed Microsoft's commitment to the standard - which currently faces a battle against the competing Blu-Ray next-generation DVD standard, created by Sony.

"The initial shipments of Xbox 360 will be based on today's DVD format," Gates explained. "We are looking at whether future versions of Xbox 360 will incorporate an additional capability of an HD DVD player or something else."

While the addition of a HD-DVD drive to Xbox 360 would allow future models to play HD movies stored on the format, it seems unlikely that the extra capacity would be available to game developers, since their titles would then not work on first-generation hardware.

Sony's PlayStation 3 is set to utilise the Blu-Ray system for both HD movie playback and game storage. Sony and Toshiba have held talks to try and establish a joint format for next-generation DVD, but these collapsed recently after Toshiba refused to accept Blu-Ray - which boasts higher capacity discs but is more expensive to manufacture - as the basis for the joint standard.

What's most interesting about Gates' comments is that they confirm that the first generation of Xbox 360 is likely to be joined over time by models with additional functionality - specifically, extra features which are designed to improve the system's abilities as a home media centre.