Well, we all knew this was coming sooner or later… Microsoft announced on Saturday that all production of the HD DVD attachment for the 360 has been stopped. Microsoft will, however, continue to honor the warranty for the drives that have already been sold. Additionally, the company said that the failure of HD DVD and the decision to stop selling the players will have “no material impact” on its video game business. You can read the full press release here.

For those of you who do own this technological white elephant, just think of it this way… it could be worse. You could have the original Nokia N-Gage.

Link: Microsoft says it will stop making HD DVD players for Xbox 360 after Blu-ray wins format war

Yesterday, Microsoft announced their second quarter earnings which showed a six-month income of $524 million. (Place little pinky in corner of mouth.) If you know much about the Xbox history, this is the first time Microsoft has made any money from the the Xbox’s Entertainment and Devices Division. In fact, they posted a $423m loss during the same period last year.

This news doesn’t make me happy because I think MS needs more money. It makes me happy because if the division is profitable, we can be sure that the Xbox will be around for a long time. I don’t want to go back to a world with only two consoles to choose from.

Hit the link for the official quarterly report from Microsoft.

Link: Microsoft Quarterly Report [Via Joystiq]

Jake over on 8Bit Joystick.com has posted a follow-up to the recent interview he did with a mysterious Microsoft “insider.” The source claimed to have a detailed knowledge regarding the Xbox 360 hardware problems. Many people around the intarwebs have taken issue with his statements, doubting the authenticity of some of his claims. The source has responded to some of the questions that were raised in order to solidify his reputation on the matter.

His answers are pretty convincing and make it difficult to doubt his story. As I stated previously, the claims he’s made don’t seem that far-fetched to me. I guess we’ll never know for sure if he’s legit, unless he comes forward and reveals his true identity. What do you think?

Link: Confidential Xbox 360 “Red Ring of Death” Source Responds

8Bit Joystick.com has posted an in-depth interview with someone they claim is a Microsoft insider. In the interview, this anonymous source reveals a lot of interesting “facts” about the Xbox 360 hardware failures and why he thinks these problems exist.

There’s no sure way to tell if this guys is for real, but many of the things he says make sense and don’t seem far fetched at all. But you should still probably take this with a small grain of salt. Not one of those regular sized grains of salt. Hit the link for the interview.

Link: Inside Source Reveal the Truth About Xbox 360 “Red Ring of Death” Failures

So, Bill Gates gave his final keynote at CES yesterday. There were no earth-shattering revelations made regarding the Xbox 360. The Xbox 360 Ultimate turned out to just be a rumor, so no built in HD DVD anytime soon. Here are the main bullet points of the event.

• The biggest announcement seems to be a deal with ABC/Disney and MGM to bring content to Xbox Live Video Marketplace. This is probably a pretty big deal for them, given that ABC/Disney is Blu-Ray exclusive.
• The other “big” announcement was the partnership with British Telecom to 360 IPTV service sometime in 2008. I say “big” in quotes because they made the IPTV announcement last year, and we’ve seen nothing actually happen since then.
• Xbox Live has reached 10 million subscribers

As you can see, there really wasn’t anything special announced. On a related note, however, Dean Takahashi has posted on his blog a letter that was sent by Microsoft games chief Don Mattrick to the MS Games employees. One of the employees forwarded it to Dean and he was kind enough to post it on his blog. I actually found this letter more interesting than the announcements made at CES. Was this a missed opportunity by Microsoft?

Hit the link for Major Nelson’s post where he provides the audio from the keynote.

Link: Microsoft Keynote at CES 2008

Three Texans filed a lawsuit this afternoon against Microsoft over the issues plaguing Xbox Live during the past couple weeks. They allege that the outages constitute a breach of contract on the part of Microsoft. Microsoft has just learned of the lawsuit today and is not yet commenting on the situation. Hit the link for the article and a link to the PDF of the complaint.

Link: Xbox Live holiday outages prompts class action lawsuit [Via Kotaku]