At the CEATEC Japan technology exhibition, now ongoing just outside of Tokyo, a manager at NEC revealed that his company is working to get Microsoft to use the format in the successor console to Xbox. A separate interview with Toshiba president Tadashi Okamura revealed a similar course for the electronics giant, with Okamura stating, in reference to HD-DVD, "We'd of course like them (Microsoft) to use it."

Both Toshiba and NEC are strong proponents for HD-DVD (High Definition Digital Versatile Disk) becoming the successor to DVD. The format is in competition with Blue Ray, which is backed by Sony and a number of other companies. This move would seem to be a direct counter to recent news that Sony Computer Entertainment plans to incorporate Blue Ray into its PlayStation 3 console. Interestingly enough, Toshiba is actually working with Sony on the Cell processor, a key component of the PS3.

There's been some concern that pricing for systems that make use of these next generation storage formats would be too high given the expected arrival time of Blue Ray and HD-DVD. At CEATEC, NEC revealed that it plans to push HD-DVD as a storage format for the PC by placing HD-DVD drives in its own computers and selling drives to other computer manufacturers. The company aims at making computers with HD-DVD drives available in the latter half of 2005, and aims for drive prices to drop to 300 dollars within half a year of inclusion.

In response to the invitations from NEC and Toshiba, Microsoft Japan Xbox spokesperson Asako Miyata commented to Bloomberg Japan, "We cannot make comments on specifics regarding the next generation system."

Microsoft has promised to reveal details on the successor to Xbox at next year's E3 show, set for May.