The company has since released a statement denying the rumor and adding that Ballmer was speaking instead of PC accessories.
"During an interview yesterday, Steve Ballmer was asked about Blu-Ray and the Xbox 360. I wanted to clear something up. Steve was referring to Blu-Ray accessories for the PC. As we have said in the past, we have no plans to introduce a Blu-Ray drive for the Xbox 360. In fact, the future of home entertainment starts very soon when Xbox 360 becomes the first and only console to offer instant-on 1080p streaming HD movies. With a library of thousands of TV shows and movies to choose from, Xbox 360 owners can instantly watch the movies they want, when they want, in the highest form of high definition," says the post on MajorNelson.
That should put the Blu-ray on Xbox 360 argument to rest, at least for the time being.