I think MS could offer a blu-ray add-on for $150. As much as MS seems to hate Blu-ray, the lack of an HD movie offering is a disadvantage to their product offering.

I not that like discs.

I have bought more games because I had 50 bucks burning a hole in my pocket. I think a lot of people are less like to buy games if they are not sitting on the shelf looking at them at Walmart or whatever store the masses shop at in your country of choice.. Going Digital only would be a disaster. It's a great gimmick for the hardcore (PSN, XLA, WVC/WW) but not for the normal consumer.

All this Blu-Ray thing is getting a bit nonsense. Do the Blu-Ray players have an option to play VideoGames? No!
So why on earth the game-consoles need a movie-watching option???

@MadHatter - Actually Blu-ray players do have the option to play video games. It's called BD-Live. DVD's don't have the option to play video games.

You mean, if I buy a Blu-Ray player and  put my MarioKart in it, I can play? (nice avatar btw)

How is Blu-Ray non sense?  The PS3 is a Blu-ray player and it plays game.  And using Blu-ray for gaming is a great thing, having the room for uncompressed 1080p videos and 7.1 Audio in games is great.  I don't see how you would not need a High capacity disc or something.

What about SD cards as a delivery method?

I can imagine in 2/3 years time 32gb SD cards will be the same price as what we currently pay for 2gb cards in 2008.

SD cards would allow for a more compact XBOX also it would allow the SD cards to be used in any future Portable XBOX.

I'd stop gaming if all games companies did this. Games would always be full price, there'd be no discounts to get rid of excess stock and there'd be no second hand market. Even if they lowered the price to £29.99 to take account of the savings made I'd never pay that much. And what would they do about bundled accessories like the Wii board and guitars?

I don't think the Gaming industry should use disc formats that other industries use because sooner or later the piracy will eat them. Just my thoughts...

I bet that if Sony had not use their latest console to promote the Blu-Ray, no gamer would ever feel the need for such thing. Now they force us to think in these terms just because they want to make profits using the gaming industry, pushing the retail prices higher than necesary. I prefer my gaming-console to be a gaming-console. If I need other media hardware I know where to look for.

I don;t know what they'll do, but I can guarantee you they won't do only digital. Their main market, the United States, is more than 3,500,000 square miles (9,000,000 km^2) of land that has practically no fiber-optic access. Heck, a very sizable portion doesn't even have ANY broadband at all. No, dd won't happen next gen. maybe not even the gen after that.