The rumors that Bill Gates will unveil during his CES keynote an Xbox 360 with an integrated HD DVD unit are flying around, but a Microsoft official denied the information.

Last year in October an Australian tech site Smarthouse reported that Microsoft is working with Toshiba on a new version of Xbox 360 with a larger hard drive and an integrated HD DVD unit. In addition, according to the report, dual HD TV tuner and a docking port for an MP3 player were also considered.

The rumor about a Super Xbox 360 emerged again ahead of CES especially after Microsoft chief Bill Gates told The Seattle Times we may expect 'big news' about the Xbox 360.

However, in an interview with GameSpot, a Microsoft official said that the company has no plans to integrate an HD-DVD player in to the Xbox 360.

"We feel that offering the drive externally is the best way to give consumers the ultimate choice to create their own high-definition experiences," he added.

Meanwhile, other sources are speculating that Microsoft may be preparing to license the Xbox gaming platform to consumer-electronics companies.

As Bill Gates will take the stage for his keynote in a few hours, we will soon find out if the rumors were true.