you really are the next patcher if you are posting stuff like this.

MS will almost definitely have blu ray in their system. if not for games for ability to say "hey it's also a blu ray player" like sony did.
Blu ray is dead IMO as well, it never served a real purpose and is only used for the ps3. blu ray movies are being replaced by streaming services and tbh DVD and blu ray differences aren't worth the extra price paid. Since PC is not download only for most games it isn't used there either.

They will use blu-ray because next xbox will die if it relies on digital data only, most of console gamers are not used to a 100% digital-distribuction console, I think it will take more time until console players are 100% used to this as PC gamers are currently. So next gen consoles will use a blu-ray or something else yet, plus digital distribuction for players that prefer to buy and download games instead of buying boxes.

BluRay was pushed in the market without demand. I mean, I never ever met someone in 2005 saying "I wish I could get a better picture than this crappy DVD offers".

It will take another 3-4 years before BluRay gets anywhere near the 65% - 70% region. In 2016 we will see digital distribution become bigger than ever. I think Digital distribution has a better chance to become the dominant "format" than BluRay.

Google fibre is offering 1000 megabits per second, that's 125 MBps, still a ton of data and twice as fast as a 12x blu-ray drive at 54 MBps.
HVD is promising the same 1 Gbps or 125MBps.

Anyway I can't buy Google fibre in a store, I would have to physically move to a location that offers that. I don't expect it to come around to my town of 11k within the next 20 years.

And sure you don't have unskippable commercials in movie streams, yet. My tv on demand provider has them for the 'free' content conveniently locking out fastforward for those programs. Once it becomes mainstream you will see the commercials appear with movies as well. My biggest problem with stream atm is that you don't have a choice of soundtracks including lossless sound and no extras.

Well, now you have met one, and 2 of my friends couldn't wait as well to get their hands on HD content. DVD was only a marginal upgrade compared to laserdisc, only the superbit collections really out performed laserdiscs uncompressed video signal. And after I bought a 52" 1080p tv dvd really started to show its age.

I have no doubt digital distribution will become the dominant format. It already killed most video rental stores. But there will still be demand for a physical format with all the extras at the highest possible bitrate.
Blu-ray market share will probably mostly increase from declining dvd sales without blu-ray sales actually increasing.

Same could be said about dvd. Why would people need dvd when everyone had vhs? If you're going to say "betta picturez" than that logic also applies for Blu. Also, no Bluray movies or players were available in 2005 and the ones that were available a year later were 1000 bucks.

turkish did not get the point.

Of course BluRay was not available I was talking about the time before BluRay, nobody wanted it.
And the jump from VHS to DVD was way more than the better picture.

The picture was MUCH better (bigger jump than DVD to BluRay). The main reason was that it was completly digital, you could skip chapters, had bonus material, WAY better sound and a menu. All this was not available with VHS. The jump now is much smaller. Better picture (not that big of a jump), better sound (even smaller jump) and some gimmick-features only hardcore fans care about.

How is digital distribution not convenient? You can watch a movie from (almost) anywhere in the world at (almost) any time without having to go to a store to buy a disc, or to ever switch discs in the device you're playing it in.

As for the bandwidth issues ...

I know of a company that is currently trying to license their compression technology that allows for a 720p movie to be streamed across a 0.5 megabit internet connection. The technology has existed since 2008 but the company was (foolishly) trying to build their own media network in Canada rather than license their technology, and getting rights in Canada for any content is nearly impossible.

As for the altered Blu-Ray disc ...

Very few game consoles have ever been produced that use a standard disc format for their games. Usually they include some variations in the specification to prevent piracy. Next generation XBox games will probably be so similar to standard Blu-Ray discs that they can be produced in standard facilities, using standard pressing machines, but the system will need to use a Blu-Ray drive with custom firmware to read the disc.

The AVS forum definitely wanted blu-ray and hd-dvd. There was a heated format war at the time starting years before the release of either.

DVD became popular so quickly bevause of it's convenience, rather then the better pq. The jump from VHS to DVD was not bigger then DVD to Blu-ray. uncompressed 240p to compressed 480p is a smaller jump then 480p to 1080p. The jump from Laserdisc to DVD was even smaller. Dvd was a godsend for rentals, no more rewinding, no more half broken tapes.

It's that convenience that's making digital distribution so popular so quickly. People are willing to take a hit in quality and features for the ease of digital distribution. Netflix operates at 0.7 mbps standard (0.3 GB/hr), that's less then 1/5th of dvd... Basically going back to VHS functuonality and quality :/ Picture quality has nothing to do with where the masses go unfortunately.

Ok....lets use my own internet as an example..

I have a modest 400k (3 megabits) from Comcast....Nothing good, but not too terrible, but certainly not good enough to try and rely upon for gaming and not good enough for watching HD movies. The majority of the world doesn't even have that.

How would an all digital console be convenient for me?  How would and all digital console be convenient for the majority of the world? How would an all digital console be convenient for Microsoft or Sony? 

I see no convenience......I see hassle.  I also see myself and the majority of the worlds console owners not buying said console.