You people realise that Sony was also one of the 4 original developers of DVD right? So MS has been paying money to Sony to use DVD since the OG Xbox....
They will use Blu-Ray as it is the best format currently available and is the current physical HD video medium, so as much as MS would like to go full digital they will need to include BLu-ray playback in their next console if they want to push the Xbox as a media centre. Globally Internet speeds just aren't there yet for full digital, but next gen is likely to be the last to feature physical media as the primary way of getting games/media, and probably transition to digital as the gen progresses. After that it's going to be all DL and cloud.
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