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makingmusic476 said:

There's no reason not to use Blu-ray, and there's plenty of reasons TO use Blu-ray.

1. They'll need more disc space next gen. That is a given. They can either go with Blu-ray, create an expensive proprietary format, or go with another new format like HVD. New formats generally come with significant costs. It's either Blu-ray or a $599 Xbox.

Of course, they could go with a blue laser variant that's very similar to Blu-ray, and thus would still be relatively cheap, but why do that when...

2. The Xbox is designed to be a multimedia device. Every multimedia device with a disc drive will have a Blu-ray drive by that time. Hell, they all do now. Microsoft will want the new Xbox to stand over and above other multimedia devices, so it'll have to include every major feature found in those other devices.

I don't understand why the alternatives are perceived to be prohibatively expensive - isn't Nintendo doing the same thing? Surely the Wii-U isn't rumoured at $599?

There are other reasons not to use Blu-ray;-

1. Stop piracy.  How many computers will have a HDDVD burner?

2. License fees.  I think I remember reading that the BDA charge $30 per device - this has probably gone down now though.

3. Streaming data speeds.  Although you can get 12x BD now, much faster than the 2x in the PS3.  They may choose to go for USB, but surely this would be very expensive.