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Steroid said:
Sony also had a big hand in CD's and DVD's (though their stake in Bluray is larger then it was for DVD). So we can get over the entire idea of MS being pwned if they decide to go blu. If anything they have done a good job on slowing down bluray adaption but slowly but surely the tide has turned in bluray's favor. I don't think a digital download only console is viable at this time and more likely then not, MS's next console will include a bluray drive.

DVD, Blu-ray Shrinking. Digital Distribution Rising

The bad news is that DVD sales are falling and Blu-ray sales, with only 4% of the market, aren’t taking up the slack. The good news is that digital distribution, with ten percent of the market share, is up 18% and rentals are up too.

 

 

Total disc sales, including standard DVDs and Blu-ray, plunged 13.9%, a slightly bigger drop than the 13.5% decline in the first six months of 2009. In an effort to downplay just how dismal revenue from DVD sales has become, DEG didn't disclose total revenue for the category.

 

Why would M$ worry about 4% of the market?

http://www.hardocp.com/news/2009/10/20/dvd_bluray_shrinking_digital_distribution_rising