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I really don't see what's in it for MS. If blu-ray ever gets big it's going to be in another couple years, by which point stand alone blu-ray players will be so cheap there won't be any incentive for people to buy an extra blu-ray player or even a blu-ray equiped 360.

What will be interesting is the formal MS chooses for the Xbox 3, while blu-ray might be standardized by that point a defunct HDDVD might give MS similar storage capacity with a difficult to pirate system.