Update: A representative of Microsoft told Shacknews that, "It is premature to speculate about Blu-ray but we do know from market data that HD movie playback is not a primary purchase driver for consumers buying video game consoles."

The representative added, "It continues to be games that drive purchase and that has consistently been a strong point for the Xbox 360 platform."

Original story: The ever-speculated Xbox 360 Blu-ray movie player add-on could arrive by May, according to rumors reported by Smarthouse. The site, which cites insiders at Microsoft, claims that the device's availability depends on "internal marketing and sales approvals," but that it may retail within three months. Read more »

Research firm iSuppli estimates that Sony's PlayStation 3 will exceed sales of the Wii and Xbox 360 by 2011, reports Reuters.

iSuppli reckons that strong momentum of the system will build during 2008, estimating that Sony will sell roughly 10.2 million PS3s worldwide through the year and double its install base to over 20 million users. Sustained growth will propel the PS3 to some 38.4 million users by 2011, which the firm suggests will position Sony as the "industry leader" in installed units. Read more »

Sales-tracking firm The NPD Group has issued its analysis of North American console hardware sales across January 2008, showing the Wii and PlayStation 3 outselling the Xbox 360.

1. Wii - 274,000

2. PlayStation 3 - 269,000 Read more »

Pacific Crest Securities analyst Evan Wilson has suggested that Microsoft and Nintendo will unveil hardware follow-ups to the Xbox 360 and Wii in 2010.

"We believe that peak industry sales will occur in 2010, given that Microsoft will likely introduce its next console that year and Nintendo will likely launch before then," Wilson told GameSpot. "Further, 2010 is also likely to coincide with the end of the Nintendo DS and Sony PSP cycles." Read more »

Electronics warranty dealer SquareTrade has estimated the Xbox 360 hardware failure rate around 16%, 1UP reports.

In a sample of over a thousand warranties sold to Xbox 360 owners, the company found that 16.4% of users experienced hardware failure, with some 60% of that number attributed to the infamous "red ring of death."

In response to hardware failure rates—which Microsoft estimates around 3%—Microsoft recently expanded their out-of-box warranty to three years from date of sale. "It is reasonable to believe these failure rates will increase over time since the Xbox 360 failure issues tend to increase with prolonged use where overheating appears the main culprit," said SquareTrade CEO Steve Abernethy. Read more »

The price of the Xbox 360 HD DVD player add-on has dropped from $179.99 to $129.99, Xbox Live director of programming Larry "Major Nelson" Hyrb has announced.

The reduction is effective in the United States, Canada, Australia and New Zealand, and units sold at the new price will continue to include the five free HD DVD offer out of the box. The player's functionality is strictly limited to the play of HD DVD and DVD discs. In early January, Warner Bros. abandoned HD DVD in favor of Blu-ray, sounding the death knell of the format with the loss of one of its greatest supporters. Read more »

Nintendo today confirmed earlier rumors by announcing a Cobalt/Black version of the DS Lite, which the comapny describes as "like a black T-shirt with a splash of color."

The dark blue color marks the seventh shade the system has received since its inception, and stands as the next logical step on the color wheel following Polar White, Coral Pink, Onyx, Crimson/Black, and the limited-edition Gold and Metallic Rose. Read more »

The latest firmware update for the PSP has arrived in North America and Europe, bringing the popular internet voice chat software Skype to the recently redesigned handheld.

The chat software, which is only compatible with the slimmer model of the portable due to its increased internal memory, permits users to call other Skype members for free and traditional telephone numbers at a cost. Read more »

New sales data released by Nintendo illustrates the company's fiscal year third quarter performance, broken down in hardware and software sales by region.

Nintendo's Wii hardware made its strongest showing at retail in the Americas, but software sales were around 15% higher in Europe. Meanwhile, DS hardware sales were strongest in Europe for the third quarter, but software sales in the Americas were roughly 45% higher. Read more »

The 80GB PlayStation 3 will be phased out in favor of a model with a larger hard drive, reports Ars Technica.

According to an unnamed source, Sony will continue offering the 40GB model alongside a "120 or 160GB at the same [$499.99] price point, plus the new DualShock 3 controller," building upon the recent suspicion that the 80GB model is being phased out of production. Read more »

Update: In a response to Shacknews, an SCEA representative did not comment on the subject of Best Buy's alleged discontinuation of the 80GB PS3, but indicated that a post addressing the matter will soon be on the official PlayStation blog.

Original Story: Best Buy will apparently discontinue sales of the $499 80GB version of the PlayStation 3, according to an alleged internal store memo sent to PS3 Fanboy. Read more »

The North American release of Skype for the PSP is still on track despite Sony Computer Entertainment Japan's delay of the Japanese edition, SCEA has confirmed with Shacknews.

As previously reported, the voice chat software will arrive by the end of January as part of a firmware update for the slim, redesigned PSP.

SCEJ announced the delay of the Japanese version this morning. According to the company, a USB microphone that was slated to hit Japanese retailers did not meet Skype's standards.

Wedbush Morgan analyst Michael Pachter is predicting that Nintendo will report sales of $5.28 billion in its Q3 report on January 24, and raise its fiscal year 2008 sales outlook above its current value of $14.5 billion, Gamasutra reports.

Global DS and Wii hardware sales during the third quarter, estimated around 12 million and 7 million respectively, were cited for the boost in projected yearly earnings. "Nintendo's recent financial performance has been spectacular and we continue to believe its FY:08 guidance is conservative," said Pachter. Read more »

Update: A Sony Computer Entertainment America representative has responded to Shacknews' inquiry, insinuating that the filing was routine and is not necessarily indicative of a forthcoming release.

"There are many FCC filings like this each year," explained the representative. "We haven't made any announcements about upcoming PS3 plans, but are comfortable with our current two SKU strategy. We are continually evaluating the market trends and consumer input to determine the appropriate PS3 models for our territory." Read more »

Sony has released a handful of images of the new Skype headset for the slim PSP, officially announced earlier this week.

You may remember the Skype PSP headset back in its heyday of being a plain ol' PSP headset, originally released in late 2005 alongside Zipper Interactive's SOCOM: U.S. Navy SEALs Fireteam Bravo (PSP) to support the game's built-in online voice chat function. What's old is new again! Read more »