Microsoft has gone on record denying rumors this week that a Blu-ray player is in the works for the Xbox 360.

Microsoft says that it doesn’t need.  As told to Edge Online, “games are what drive consumers to purchase game consoles, and we remain focused on providing the largest library of blockbuster games available.”

This may seem odd when Microsoft is also gearing up to release the new Xbox Live Experience in November, which will add all sorts of new features to the Xbox 360 and Xbox Live service beyond the scope of games.

The new Blu-ray player will likely be similar to the obsolete Xbox 360 HD-DVD player.

According to a report by Xbit Labs, Microsoft will be releasing an external Blu-ray player for the Xbox 360 console.

The report claims that Microsoft will sell the device within the $100-150 U.S. range in order to compete with the Sony PlayStation 3, which has a built-in Blu-ray player.

Rumours of a Blu-ray player for the Xbox 360 have been around ever since the demise of the Microsft-backed HD-DVD format, and the consequent Blu-ray victory in the format wars.  The Blu-ray device would replace the external HD-DVD player that Microsoft pulled in February 2008.

[UPDATE: Microsoft has since denied this claim.]