In an interview with Gamespot, Microsoft's general manager of their game developer group, Chris Satchell, confirmed the rumors and reported leaks concerning a future update to the Xbox 360 hardware. When asked directly about the possibility of an HDMI-enabled Xbox 360 somewhere down the line, Satchell said "If you want to get great HD, I think we've got a good solution for that. In the future it's interesting to see where standards evolve to." He then follows up this statement with "At the moment, everything you might have seen is just looking at our experimentation back in Redmond, not really a product that we're thinking about announcing."
Rumors of an HDMI-enabled Xbox 360 have been kicking around ever since Microsoft introduced 1080P for the Xbox 360 via component this past September. Since then, everything from the Lost Planet "typo" to leaked shots of modified 360's have set off alarms across the internet. So while it's great to know that Microsoft is looking into every possibility, it's also hard to swallow that they won't be actively pursuing this opportunity in the marketplace .