It's been a rough start to 2008 for the next-generation high-definition format backed by Microsoft, HD DVD, which is being eulogized around the Web today. The latest blow comes from Wal-Mart, which announced today that, by June, it will stock exclusively Blu-ray movies and players, in addition to its standard definition lines. And The Hollywood Reporter is quoting "reliable industry sources" who say that even HD DVD's prime backer, Toshiba, is expected to give up the format fight "sometime in the coming weeks." Netflix and Best Buy jumped on the Blu-ray bandwagon earlier this week.

All of which raises the question of what's next for Microsoft, which sells a $130 add-on HD DVD player for its Xbox 360. Unlike Sony's PlayStation 3, the device is not built-in. That helped Microsoft keep the price of the Xbox 360 lower at first. Sony has since cut its price for the PS3, and it bet on the winning hi-def horse, with a Blu-ray player built in to each box. In fact, the cheapest way to play high-def optical media through a game console now is to buy a $400 40-gigabyte Sony PlayStation 3. To match that, you'd have to buy an Xbox 360 for $350 and the $130 HD DVD add-on.

I asked a spokeswoman with the PR firm that handles Xbox for comment on Microsoft's plans if HD DVD should officially bite the dust. The company is sticking with it for now, but with caveats.

"Microsoft's plans for HD DVD won't change as long as they continue to see strong consumer interest and their partners remain committed. Sales of HD DVD players have remained brisk and there is a healthy catalog of more than 400 HD DVD titles offered at retail," she wrote in an email.

What about the possibility of switching to a Blu-ray player as an add-on?

"[I]t's too premature to say, but as Microsoft has long stated, Xbox is focused on delivering great high-definition experiences to consumers -- whether it's through HD gaming, digital downloads through Xbox LIVE Marketplace, optical media or IPTV."

So, gamers, would you like the option of a Blu-ray add-on for Xbox 360? And what would you pay for it?