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Dallinor said:
"According to a Financial Times report yesterday, Microsoft and Sony are currently in talks to offer a Blu-ray drive for the Xbox 360."

If the add-on costs about $400, many 360 gamers interested in Blu-ray might be tempted to get a PS3 instead. With a similar price and coupled with the fact that it plays games, the PS3 would undoubtedly be more appealing to many.

Pricing for the add-on will be key if it's to have any success.

The launch price of the HD-DVD add-on was $199.  There's no way MS is so stupid that they will release an add-on that costs more than majority of the 360s available.  I'm expecting the Blu-ray add-on to launch at $150.  It's a VERY simple device considering most of the work happens in the 360 itself.