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thekitchensink said:
Mostlikely Blu-Ray or their own proprietary format (a 'la GameCube). I do think it will be able to playboth Blu-Rays and HD-DVDs, though.

 Why would it have compatibility with a legacy format that lasted 2 years in the wild and which will have been dead for at least 1 year before the launch of the next MS console?