HappySqurriel on 01 August 2012
It is likely that Microsoft will use an altered Blu-Ray disc as their game disc format, and since Microsoft (generally) includes all media functionality in their system it is likely that the system will play Blu-Ray movies ...
With that said, Blu-Ray's slow adoption demonstrates that it only had moderate justification for its existence. Essentially, it primarily offers enhanced visual quality over DVD and doesn't offer the convenience or low cost of digital distribution.
