- CGI vs in-engine: you missed an important point. In-engine is cheaper as long as it is simpler in effects, models, animations, scope and postprocessing setup. As engines get more complex you can approach the quality of CGI, but you're doing so by putting more and more man hours into setting those in-engine scenes, using real actors for motion capture and developing extra assets and effects.

So in-engine is cheaper than CGI as long as it's not as good, basically :) The day we'll have consoles and GPUs doing real-time raytracing and all the other rendering tricks there will be, obviously, no distinction. Until then, you only go in-engine when it's "good enough". But if you want something special - say, your engine is optimized for small-medium distances but you want an epic birdseye cutscene - you still have to resort to CGI. And that's just a must for strategy games, flight simulators, RPGs, basically anything which engine is not designed around human figures in closeup / full figure / midfield shots, or that requires a great variety of scopes in its cutscenes.

Plus, the proof is in the pudding: the 360 and PS3 are certainly more capable at rendering cutscenes than the Xbox or PS2. Are Lost Odissey, Star Ocean 4 or Final Fantasy XIII (we don't know the exact size yet, but I think you'll agree it will be 1 BR /4+ DVDs) smaller or bigger than the comparably long (in gameplay) SO3, FFX and FFXII?

I don't have the technical knowledge to argue this any further. So I have to concede these points to you.

- MS hasn't put much weight behind DVD playing because by the time the 360 was out everybody had a player yet - and they sold for $39 - and yet they payed the license for DVD and produced an add-on for HD-DVD playing. And when was Nintendo in it for the multimedia anyway?

But in 2011-2013 any media hub - and there will be many - coming out without BluRay playing capability will be second-rate. BluRay playing will have value, but not be entirely common. Not only that, but the consoles will probably be among the best BluRay players out there, because they are much more complex than DVD players: a proper BluRay 2.0 player must have an HDD, must be able to process Java code quickly, must offer network connectivity, must be strong in parallel stream processing.

As for digital distribution, it will make good money for MS, but it can't be the only option for a number of years yet. There's not enough network infrastructure for most customers for which that quality is good enough, and that's not even a given. Either they wait at least another 5 years or they limit their audience to a small fraction of the one they could have by simply including a - by 2011 - $50 optical drive. Plus, where are you supposed to store all the stuff you download if that's the only access option? HDDs are fickle beasts when their size grows enough. My DVDs and BluRays are much safer as a storage medium, and I can lend them to my friends at will.

- The only really safe way for publishers to cut the used game market will be on-demand digital distribution. Flash cards allow some extra tricks by being writeable (I suppose you can write a special sector using the console id as an encryption key, then verify its content vs a public key) but I have little doubt the mechanism will be broken by exploiting one of the exceptional occurences, such as console replacement. That's the future of any hardware on which people can put their hands in :)

Endline: I agree with some of your opinions but not for the near future timeframe. I actually long for the day we'll see a better replacement to optical disks. But they are simply a very cheap way to convey a high density of information.

If DVD playback wasn't a priority due to the propunderance of cheap players then why would the same not apply to BRD playback? BRD players could easily be $50-$75 by the time the next generation consoles come out and the people who already use BRD's would already have a setup to take advantage of the format. Why would BR be any differenent in the future to how DVD is now?

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I'll only specify something about this one, as it's more properly on topic.

1) Once again, timeframe. BluRay players are unlikely to be as common and cheap as the DVD was, by the time the next generation specs are finalized.

2) BluRay players are much more complicated than DVD players, as i said. A quality, no-fuss specialized DVD player makes more sense because the hardware and software are relatively simple. You can have quality electronic and silicon, offering better image quality and postprocessing.

Network, HDD, interactive Java scripts, solid parallel performance. You have to duplicate all these console features in a BluRay player. Does it make as much sense to have such a player connected to you TV and to your home network and to your audio mixer in parallel with the console that performs the same functions on different media types?

It will probably be ok for people buying cheap BluRay players and that don't care about anything other than the tv stereo sound, or don't use the network features. But mid to high-range players make much less sense if you are also going to have a media hub/console to play all digital file formats, rip your CDs etc. Those hubs can potentially be among the best BluRay players, and more easily updated and upgraded to new standards.

Plus, price-wise, this potential hardware and software duplication means that a a BR-less console+BR player is poised to be quite less conveninet than an integrated setup, compared to a DVD-less console+DVD player vs integrated DVD playing.

Edit: btw, in the light of avoiding useless hardware duplication, MS could of course take the way in their next console of offering the BR/DVD optical reader as an add-on, and resort to flash/digital distribution as default. The issue at that point is between them and the publishers as to which format makes more sense because of size/cost/DRM. As I said, I think the timeframes and the network infrastructure progress are the critical factors here.