Yeah, but MS is not trying to make a Blu Ray player. They want to create a home media hub - with digital streaming and Silverlight. Blu Ray licensing will be too expensive (they have paid for the HD-DVD licensing), and it will also say to Sony 'You were right - Blu Ray rules.' They don't want folks buying Blus - they want folks renting their movies and using their console to play games.

HD-DVD offers them save-face. They can get the storage they need without crying uncle. They already have the infrastructure in place - and the tools that made HD-DVD are still around. Plus, they could also generate enough of a following to get PC builders on board. Regardless, they will have enough customers - hopefully with insane attach rates - to keep the demand up. You look at the DS - the Gameboy - formats that are only compatible with it - and it's thriving.

We'll all see, but I do think strongly that overlooking HD-DVD - and its storage - would be a mistake for MS.

Yeah that's true, both Live and the PSN have movies and tv shows for download. I guess that will be a major use in the future.

@the DS/Gameboy comment, its just a handheld, its not a big multimedia device.
Isn't it correct Microsoft wants the Xbox to be the center of the Entertainment center, they want to be in the living room as a good multimedia device, adding bluray support would only add to that motive.

But DD seems very promising, do you know if the videos have protection on them? Is it possible to move them to a flash drive and watch them on a PC?

You can already get a 4GB flash drive for $9 on Newegg which means in reality it can be had in large volumes for probably $4-5 or less, a custom design not using the USB standard and read only flash would be cheaper. In a year, that flash drive will be the same price for 8GB for the same price and a couple of years later it will be 16GB. So we're looking at ultra cheap 16GB flash memory by the time the generation starts over, then once 450mm wafers hit full speed we're looking at each flash module being cheaper to produce and capacities rising to 32 and 64GB with production costs plummeting.

If the cost of one optical drive is greater than 6-7 flash drives, which would you choose? Would you choose a payout upfront with higher costs over time which diminish or do you resign yourself to paying the fixed cost of that optical drive for every console you ever produce?

I would go for flash any day, it seems like the perfect easy to use media.

I think BR will probably be their medium of choice simply because its the next physical video format.

Personally I want solid state memory!!!

Squilliam said: What physical medium in say a couple of years time? Hmm, how about digital distribution and catridges! Physically an optical drive adds about $100 to the baseline cost of a console when you factor in the required HDD, Ram, packaging and optical drive itself. So much extra stuff has to be added to a console to make up for the deficiencies of the optical drive format. My guess for the next generation they will keep the console simple. Xbox next Arcade = 10GB of fast flash storage + cartridge media. Xbox next Premium = 10GB of fast storage + cartridge media + HDD Xbox next Elite = same as above with optical drive for BC. The transition to 450mm wafers is upon us! Flash is just getting cheaper.

Economically though, it makes more sense to use the optical media for distribution (which also means you're compatible with all movie formats and with PC media) in parallel to Digital Distribution and to use Solid state discs instead of HDD for storage/to overcome "the deficiencieses of the optical drive format" with which I suppose you're thinking of random access lantencies and throughput.

With flash getting cheaper - in a 3-5 years timespan, I'm pretty sure that the first thing to go away will be the flash memory/HDD separation, and with digital distribution becoming a viable alternative at least for a minority of people the whole software and hardware will have to be tailored around playing installed and authenticated games. So why burden publishers with extra cost for the flash stick physical medium, if the console can provide the fast buffer itself? It doesn't make much sense as an alternative to DD.

WereKitten said: Squilliam said: What physical medium in say a couple of years time? Hmm, how about digital distribution and catridges! Physically an optical drive adds about $100 to the baseline cost of a console when you factor in the required HDD, Ram, packaging and optical drive itself. So much extra stuff has to be added to a console to make up for the deficiencies of the optical drive format. My guess for the next generation they will keep the console simple. Xbox next Arcade = 10GB of fast flash storage + cartridge media. Xbox next Premium = 10GB of fast storage + cartridge media + HDD Xbox next Elite = same as above with optical drive for BC. The transition to 450mm wafers is upon us! Flash is just getting cheaper. Economically though, it makes more sense to use the optical media for distribution (which also means you're compatible with all movie formats and with PC media) in parallel to Digital Distribution and to use Solid state discs instead of HDD for storage/to overcome "the deficiencieses of the optical drive format" with which I suppose you're thinking of random access lantencies and throughput. With flash getting cheaper - in a 3-5 years timespan, I'm pretty sure that the first thing to go away will be the flash memory/HDD separation, and with digital distribution becoming a viable alternative at least for a minority of people the whole software and hardware will have to be tailored around playing installed and authenticated games. So why burden publishers with extra cost for the flash stick physical medium, if the console can provide the fast buffer itself? It doesn't make much sense as an alternative to DD.

Actually the flash memory was to ensure that whether the game was loaded from the HDD or from a cartridge that the performance seen by the developer would be the same. I was actually concerned with the slow HDD speed and in keeping up with the idea that the 'pro' SKU be just an Arcade with a HDD.

The reasons why I believe that flash would be a good solution are:

1. They can use price stratification, say $55 for a direct download or kiosk download and say $65 for a resellable disc. That way the people buying the game can have an as cheap or cheaper option than the 2nd hand market. They can also sell other products like Music and movies through those same kiosks and kill several birds with one stone.

2. They don't have to pay the $25 or so for the optical drives, nor pay for extra Ram, nor use a mechanical HDD in the Arcade SKU and they can package the console better. The cost savings up front outweigh the extra cost from about the first 5-7 flash cartridges.

3. Not having an optical drive allows them to package the console in other products as well. You could see for example a console based entertainment system in a car, or in the TV or in the Cable box. If they had to have an optical drive the architecture wouldn't be as useful for this functionality.

4. It makes piracy harder, people cannot simply burn a DVD or Blu Ray disc. They can keep the DRM chain locked throughout the different stages and it makes it easier to make changes to prevent piracy.

we have atleast 2-3 years before Xbox 3 announcement and they are already heading to digital distribution on xbox 360. sony went to digital distribution only with PSP GO.

xbox 3 will be using digital distribution with vouchers that will have printed game guides and prepaid cards to buy specific games. it cost less money, takes less space and is good for retailers, developers, publishers and microsoft - everyone is happy.

I can't believe how many people seem to think that Sony and Microsoft are locked in some kind of all out war just because they have competing video game consoles. Sony uses many Microsoft products windows on their laptops/netbooks, winmobile on selected cell phones etc. plus Sony doesn't own Blu-Ray they are just part of the blu-ray consortium.

so back on topic what physical medium? well Microsoft prolly don't know themselves but I would say blu-ray (25-50GB possibly 100GB) or standard DVDs (4.7-8.54GB) are the fore runners for optical formats with HD-DVD (15-30 GB) and VMD (20GB) as possibillities

alternatively some form of cards or carts are possible but not likely.

pure digital distribution is possible but not likely as the Internet speeds and data caps would severely limit the userbase and attach rate not to mention the cost of storage for all the games. sure the current model is showing strong growth but thats with games mostly under 250MB imagine downloading MGS4 sized games 20GB + and then you have to store it so every model would need a big HDD to store more than a few games and that would be very expensive.

People talking about digital download are derailing this thread. I asked what physical medium will the Microsoft be using next gen. Digital download is not a physical medium. There is no way they are going to be using it as a main means of selling their games to the vast majority of their consumers.