Microsoft is adding Blu Ray support where it makes sense...
In Windows
http://www.informationweek.com/news/showArticle.jhtml?articleID=206903001
"Microsoft CEO Steve Ballmer said his company is working on Windows device driver support for Sony's Blu-ray high definition movie format. "
"Ballmer, however, made clear at Mix '08 that over the long term Microsoft sees the Internet, and not discs, as the primary vehicle for HD content access. "Five years from now, it may not make a bit of difference" whether the Xbox or other devices have DVD drives, Ballmer said. "
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