From HD DVD.com: “As part of a cross-licensing agreement with Microsoft, the latest PS3 firmware update allows the PS3 Blu-ray drive to play HD DVD discs, complete with the HDi interactivity layer. In the other part of the cross-licensing agreement, the Xbox 360 will now come with a Blu-ray drive built-in. Microsoft Xbox spokespeople were quick to mention that they still believe the future of movie viewing lies in downloads and that they have a commercial — actually a documentary — produced, directed, written by, and starring Michael Bay attesting to that high-def strategy…”

“When asked why they waited this long to announce these breakthroughs, Microsoft pointed the finger of blame in Sony’s direction saying that Sony only downloaded the 360’s HD DVD emulator when it finally become free. Sony spokespeople responded that they’d have downloaded it months earlier had their Xbox Live account not been banned due to Halo 3 cheating, and mentioned problems using Visual Studio 2008 on their “Vista Capable” workstations.

Warner Bros. was in on the plan all along, and that’s why they kept their HD DVD options and release slate open until May. Having confused these negotiations with those of the striking Screen Writers Guild, it appears that Universal and Paramount weren’t kept abreast of the developments, and thus they quit making HD DVDs in March. Amazon’s Jeff Bezos denied knowledge of the deal, as did DeepDiscount.com, but many are highly suspicious because both of these retailers continued advertising Bee Movie on HD DVD at their sites’ home pages well into the month of March.

Representatives from both Sony and Microsoft denied any payoffs to each other, but it’s been rumored that the money was confiscated by EU officials who wanted to promote fair competition by subsidizing NME, makers of the HD-VMD format.

We’ll have more information on this incredible story as it develops.”