Microsoft believed in HD DVD but last generation their biggest issue was bringing down the cost of the original XBox. This is the biggest reason why they did not put HD DVD into the 360. Microsoft stated many times when they started the generation that they wanted to give consumers choice and did not want to force this cost on them.

If they did, Sony would be in 2nd place this generation right now and not 360. A huge reason why Microsoft is maintaining 2nd place is because Sony has been unable to move on price. Giving HD DVD capability to 360 was a hedge bet. If HD formats would have taken off, they would have one on 360. But, because the adoption of both HD formats ended up being so slow they decided it wasn't worth it to continue once blu-ray one the war.

As for digital distribution, Microsoft has simply responded to market demand. The popularity of Steam is forcing consoles to go this way.

@ Reasonable, im sorry I just hold you to an unreasonably high standard!

To the OP. How do you know MS put loads of money in HD-DVD.

In response to the question. I dont think they were overly bothered.

Its not like Blu Ray has proved essential for HD Games thus far.

They hedged their bets and are probably feeling quite smug as digital delivery grows faster than Blu Ray.

I have both, and I quite preferred the formats and feature styles and the HD-DVD/DVD combo discs, where you could watch them on either. HD-DVD was the better format, in my opinion. Sony threw SO much money at it, and they are paying for it.

They had to, though. Can you imagine where Sony as a whole and PS3 in particular would be right not if Blu-Ray had failed? They'd be screwed royally. So the money spent to ensure the format win was well spent, I guess?

THIS!!!!

Squilliam said: @ Reasonable, im sorry I just hold you to an unreasonably high standard!

And I shall try my best to hit that standard...

I have to disagree. I think MS wanted HD DVD to win, because HD DD is still not a viable content delivery system for a large percentage of the population. The fact that almost all ISPs cap downloads makes HD DD a problem. Who wants to pay for the movie, then get charged again by your ISP when you go over the download limit. And then you need the delivery system, and they have the X360, but still not everyone who wants HD will by an xbox just to watch movies. Add to the fact that MS made money by selling an HD DVD add on to the xbox and I'd have to say that MS wanted it to win. Sure they're pushing DD hard, but is this actually because it was their plan, or is it their response because they lost? I'm leaning towards the latter.

My friend your OP, as well as your response to me, is completely based on speculation. You are defending a dead format so it doesn't seem like MS screwed up. Companies fuck up all the time, backing HD DVD was a fuck up on MS' part. They thought it would succeed and take Blu Ray out. There is absolutley no way they would invest millions of dollars simply to hinder BR. They only started this whole digital distribution BS after Blu Ray destroyed their supported format. Even if an official from MS said what you are arguing (which they probably never will) I wouldn't believe it because it simply makes no logical sense.

Then tell me if they were supporting it so much why didn't they put the HD-DVD drive into at least one of their SKU's.  They weren't supporting it as much as you say.  MS is way smarter than you think they are...

They didn't put it in their SKU's because the console would cost too much. Plain and simple. Not everybody who buys a 360 is looking for a media center, so MS quite smartly decided not to add HD DVD built in with the console. Like you said, they are extremely smart. But this doesn't mean that they can't make mistakes. There is no way a company spends millions of dollars towards something they know is going to fail in the end.