I am curious to see your thoughts on how MS will deliver games with the next version of the xbox.  MS has stated that digital delivery is their strategic direction, but do you think they will rely solely on downloads for game delivery with the next version of the Xbox?  Currently I would say their options are to use digital download, DVD, a proprietary technology, or Blu-ray.  Personally, I think that Blu-ray will be their best option because it will keep the system competitive as a media center, the 4x Blu-ray players will provide more than enough speed/storage for gaming, it will be cheaper than developing a proprietary system, and it will not segment their customers to high speed Internet users. 

I know that we are a few years away from new consoles, but I think it is an interesting topic for discussion.

Some researchers in Australia developed some technology to decode fiber optic signals faster. And it is cheap, so hopefully we will see exponential speed increases in the next 5 years or so. After that digital delivery will be the norm, best for the environment and publisher's pockets.

well if they go down the digital download route then they wont sell many xbox 720's in the uk, because it would take hours and hours to download game over are old copper internet network, untill the goverment makes bt(british telecom) upgrade the network to fibre optic then digital downlaods will never work in here

My view is, if they don't go digital exclusive next gen then they most definitely will the generation after that. It just makes sense as it lowers distribution costs so the developers and publishers make more money, it lowers the cost of games so consumers are happy, its better for the environment and Microsoft will be able to get a massive amount of people paying for games/movies on a system they completely control, thus giving them the media centre capabilities they need whilst decreasing the cost of the consoles as they wont need optical drives.

they would be making a big mistake, not every 1 has mega fast interet throught cable/fibre optics so they would be restricing there userbase to a few countries ie usa/korea where fibre optics has taken off

The next generation will offer both, blu-ray and digital distribution. The next one, in the year 2018 maybe, will just support digital delivery.

^^Yeah, it might not be for a while, but it is definitely going to happen.

It seems to me that they will need to include Blu-ray in the next version. If that is true, do you think they should sell a 360 with an integrated Blu-ray drive? I do think the 360 loses some sales because it lacks a viable HD disc solution. If they will include it in the next version, they should consider offering it to this generation.

I don't think they should rely solely on downloads. They would have to rely on people buying the cards at the store or using credit cards, which could isolate some of their audience and the amount of games people bought.

Also, they would be at a major disadvantage if they occupied that much less shelf-space. Imagine that it is Christmas time and you are looking for gifts for your kids, you wouldn't be able to pick up anything for the Microsoft system but Sony and Nintendo sections are full of games.

They shouldn't include a Blu-ray drive this gen, because they would have big losses.