MS already has paid the license to use it (HD-DVD). It offers the storage MS needs, and will thrive as a storage medium. Why? It offers a cheaper alternative to Blu Ray. Plus, the DS has proven you can make games on a storage medium that only one system uses. It's full of win for MS - and they can deny Blu Ray a win, AND still focus on their DD - and allow the new device to play old HD-DVD movies. It's 1080P on the cheap.

And guess what? It can be revived again. Look at Xbox's following now. It can be the sole customer for the format, though I think PC types will buy burners as well. The infrastructure is in place, and the tools that made HD-DVDs aren't destroyed, so why not?

What can Blu Ray do that HD-DVD doesn't? It was neck and neck - the studios and retailers gave the format a cold shoulder. I bet Hollywood would jump back in bed with HD-DVD if the next box was sizzling.

I agree. I think MS would like for it to go this route, but folks are still offline or on dialup. It's next-next gen, and maybe even longer than that.

Digital Downloads increased 73% over the financial year vs 50% increase for overall console sales and live subscriptions. If that trend continues and the digital downloads increase another 20-30% over an above whatever install base increase there is and this trend continues for the next couple of years, digital downloads will become critical to the success and prosperity of the system.

Hell they could simply offer people the chance to pay $10 and digitise the game whilst turning in the disc and that would go pretty well with any kiosk system they set up if they chose to go that route with the next Xbox.

They will still need a physical medium next generation.

Flash memory!

Its the future.

I rarely disagree with you, but this one I will. MS won't make the same mistake Sony did. They will NOT alienate the 30M+ gamers by making a system their games can't play on. BC will be a big part of next-gen consoles. While Flash is good for a lot of thing, flash drives can be easily hacked vs. discs. Plus, discs wear out and break a lot easier than a flash drive. There are industries that thrive on things breaking down - wheels and tires, windows and windshields, even automotive.

I'm sure Microsoft will go with cutting edge technology.

I think Bluray would be a better choice since it would be able to play Bluray movies. If I had a Xbox that plays blurays then I wouldn't need a Bluray player. It's just a plus for the consumer. Plus bluray seems like it will be the dominant format for the next several years so why not use it?

They can make the Arcade/Premium units cheap and simple. They can cut $50 off the launch price of the console by not including an optical drive. Just as Sony offered a more expensive SKU with BC, what would stop them? Its fair for people who want BC in that they have to pay extra for it, but its also fair for people who don't.