Blu-ray &Hardware Steven Kippel on 14 May 2008

Microsoft denies Blu-ray Xbox rumor

Microsoft denies Blu-ray Xbox rumor

Microsoft Xbox 360Some rumors just won’t die. I’ve stayed away from it for the most part since January, when Microsoft marketing manager Albert Penello said, “It should be a consumer choice.”

This latest rumor came out of a Chinese publication called Economic Daily News in early May that said Pegatron Technology was tapped to manufacture a Blu-ray integrated Xbox 360 which would ship in time for Christmas. There are obviously technological challenges here considering all Xbox games are on DVD, and a game could not be released on Blu-ray without alienating the installed base at nearly 19-million world wide.

The response from Microsoft came quickly and resolutely.

As we have stated, we have no plans to introduce a Blu-ray drive for Xbox 360. Games are what drive consumers to purchase game consoles, and we remain focused on providing the largest library of blockbuster games available.

While this is a pretty straight forward response, not deflecting the question at all, it does bring up a few questions. If they won’t sell a Blu-ray drive because they’re focused on games, what was the HD DVD add-on? What’s with Xbox Live video downloads? These are just the surface of the issue, clearly, for Microsoft has been leveraging the Xbox 360 to gain entrance into homes as a Media Center Extender for quite some time. They’ve made it clear they intend the 360 to be a central part of the home theater experience.

Add to this the fact that video downloads are now a $1-billion/yr business and growing, and they’re not just competing with Sony anymore now that Apple TV, Netflix, Amazon, Vudu and a growing number of providers are now entering with growing fervor into the market the Xbox 360 helped create, and you have a whole new ball game. (Sorry about the sports analogy, I don’t even like sports.)

So this brings a new level of market competition, and a new debate about optical media versus downloads. If Microsoft is fully committed to digital downloads what need of Blu-ray have they? Which brings us back to the rumors that Microsoft was only supporting HD DVD to kill off both next-gen formats. I’ll leave that up to you to decide.

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