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I wouldn't say it's paying off. It already paid off, it got them a head start in the market by being able to release the console earlier and more cheaply. If the war is finally decided in favor of Bluray, it only helps the PS3. Even if MS decides to add a Bluray player to the 360, it'll only be for movies, not games.

Also, it would seem like the availability of a Blu-ray player for the 360 would depend on Sony granting MS a license for it, wouldn't it? You think they're going to do that?