They have numerous options. I wouldn't put it past them to make that which lost Sony a lot of money last generation, Blu Ray into a profit centre if they did choose to go with it. A $50 charge to enable playback wouldn't surprise anyone, really.

The funny thing about this is that the next X-Box will definitely have a Blu-ray drive in it.  That is unless MS wants to fail next gen.  Blu-ray keeps climbing in sales, and by the time next gen rolls around in a couple of years, it will be either just under DVD's in terms of sales numbers or even with it.  If MS goes with DVD again, with all the space that is going to be needed for next gen for the more powerful systems, they will be ridiculed for continuing to use outdated tech in a piece of HW.  2 discs would probably be the minimum all games would require. 

Or they could try to come up with their own high storage capacity format.  Problem with that is they would end up spending more on developing it than they would ever make back next gen.  This is mostly because it would only be used for gaming on the next X-Box (I'm sure MS would charge a nice fee to use said discs to recoup costs, which may turn developers off) and not be used by studios for movies, as all studios are backing Blu-ray and will for quite some time.

Another advantage of Blu-ray is its no longer brand new tech, so improvements have occured and costs have dropped.  This will help lower the cost of the PS4.  And with a 8x, maybe even 16x, Blu-ray drive in the PS4, load times will become a thing of the past.

So, basically MS has little choice but to go with Blu-ray.  Of course, they could go for DD only, but that would fail harder than if they stuck with DVD.

Well the the download is about 26GB.

Regardless, its just uncompressed data.

Just as the Wii would definately be able to play back DVD movies out of the box in the following generation because the ultra successful PS2 did it.

I don't know if he said that, but if he did he is a liar.

It doesn't count as PS3 owners seem to have no issues with installs, only in game disk swaps.

also it doesn't count cause the whole game is on 1 disk. One can consider the extra cars on disk 2 as a gift or free DLC.

The Wii was never intended to be an all-in-one convergence device like the ps3 and 360.  I have no doubt the next Xbox will support Blu-ray playback alongside DVD and CD playback.  They'll do this at the very least to compete with Sony on a per feature basis (the HD DVD add-on says hello!), if not simply because they want to improve the inherent media playback functionality of the device.

Kojima has only ever said that MGS4 maxed out a single-layer Blu-ray disc, thus necessitating the need to go dual-layered.  This was purposefully miscontrued by over zealous fans looking for reasons to praise Blu-ray, and the misinformation spread from there.

Yeah I figured as much.

MGS4 is one huge game so I can see why fans thought it was maxing out limits of the universe :)

Blu-ray dead? What planet is he on? In regards to being a pre-requisit for a good game? Ok, point taken, but as a format? When I can go out and buy a BD player here in Australia for $100AU and get BD movies commonly around 10-12 bucks, and you can see just how much BD is starting to entrench, this guy here is merely talking crap. It's as simple as that.

The reality is that people in lego land have far less awareness of streaming than what they do of a good old fashion physical format. By the time we all have 100mb/sec connections and streaming becomes as common the X gens as iPods are to Y gens, now, BD will be as entrenched as what DVD was. Guarantee it.

Well DVD was growing when digital downloads wasn't very relevant. Rentals also come from vending machines now.

So... good luck BluRay. You'll need it.