Yes digital distribution will suceed DVD as soon as people start tolerating a 20 hour wait(at least) to watch a 2hour HD movie.
Microsoft could be the next Sega. Focusing on releasing early and dropping their consoles after 4 years(360 won't make it into 2010).
Sorry Microsoft, fail.

Digital downloads for purchase can kiss my fucking ass, for rent it's good, but with all the DRM bullshit that PSN, XBL and itunes have on movies and TV Shows, they can go fuck themselves, PSN has a fair DRM on games, and that's the only fair DRM I've ever seen.

I've owned one since mid-2005 and never bought a UMD movie.

And I was going to get the BluRay add on.... if it were $150....

Sad...

Wow! What a refreshingly impartial viewpoint this "Aaron Greenberg" espouses. It's almost as if he has nothing to gain if Blu-Ray becomes a catastrophic failure. Keep up the good work, Microsoft employees!

Also M$ has to remember that a large portion of the US market does not have high speed internet. There are a lot of small towns in this country that buy a lot of games and movies. (I use to live in one)

How about Europe?!?

UMD was impractical and had bad support. The entire point of having to buy a movie just to watch it on a tiny screen was enough to kill the format.

When I see huge shelf spaces devoted to Blu-ray and blockbuster DVD releases seeing a decent percentage of their sales on Blu-ray, I have to disagree. Truth be told, nearly everyone I've met is interested in the Blu-ray/HD scene. They just can't afford it. As prices go down, more and more people will adopt Blu-ray.

If you ask me, digitally distributed movies are the next bottled water.

The main and foremost reason the MicroSoft uses the "DD is the future" propaganda is because MicroSoft wants it to be the future.

So they can control more and prevent customers from reselling their games, movies and music.
But what they totally ignore is the fact that far from everybody have a fast connection like Cable or DSL and customer like the convenience of the physical media of a widely supported format.
If electronics break ( *cough rrod cough * ), they only have to replace the electronics, not the media.
And if the format is widely supported they have more than enough choice about where to buy the new electronics, which brand and with which features and options.

Even if the amount of Hi-Def DD-consumers would start groing, then the ISP's want their peace of the pie too and consumers will have to pay more to consume those Digital Downloads.

Microsoft can hope whatever they want, it'll take much more years than they hope before those Hi-Def Digital Downloads means anything.
And even if the time arrives, a good video-game will take up at least 4 till 5 times more storage-space then the latest games.

 QFT.