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Reasonable said:
Apart from the Blu-Ray bit (which seems obvious to me as being likely) the rest sounds well dodgy IMHO.

And could cost them the hardware race! I know I buy lots of games second hand myself, and most ppl I know do. Not just that, but remember when the PS and PS2 exploded when piracy was in gears? The first few mod chips made those systems so appealing, people could have hundreds of games free!

A DRM system for physical copies could prove disastrous as a strategy, I don't believe MS is foolish enough to do that, especially given how business-wise they have proven throughout this last gen.