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rocketpig said:
With Blu-ray becoming the de facto standard for high definition optical content, MS is going to be forced to add it to their console if they wish to become the living room hub of the future.

They'll always push the downloads because they make money from them but they also need Blu-ray to round out the capabilities of the device.

 A few things I think you forgot to take into account in this thread Rocketpig.

One is Sony owns Blu-ray. It's not MS's choice if they have it for there next console, it's Sony's.

Two, is the 300-400 next xbox does not need to worry about the PS3 or the 360, they need to worry about the PS4. If it comes out 10 times more capable then the PS3, and yet is less capable then the PS4, they are in trouble.

The PS4 is in much better shape then the xbox3. The PS3 continues to build quality libraries for the Cell, and the CELL is designed to scale beautifully.  The Cell will also be small and cheap by the time the PS4 comes around. The PS4 could have a gig or two of ram, three CELL's, BD, and cost $299.

The PPC in the 360 is all but dead. MS will have to find a new solution for the next console. That will effect backwards compatibility (something the PS4 will do with ease), and they will need to create new tools for whatever solution they use (that cost money).

Lastly, the next xbox has to be the most reliable piece of consumer electronics ever made. That won't be cheap either.

MS has put themselves in a place where the future looks very very strong for the competition, and MS currently has no answers.

When Japan attacked Peal Harbor, the leader of there military (A man who didn't want to do it) said "I fear all we have done is awoke a sleeping giant". I think MS just returned the favor. They woke up Sony, and now Sony has a very strong 10 years ahead of it with respect to console gaming.