Will I be able to rock out to Celine on my Xbox 360?

As a result of the CES jaw dropping announcement that Warner Bros. will be going exclusive to the Blu-ray format, it appears that the new disk format 'stalemate' between HD DVD and Blu-ray has all but ended.  Warner Bros. is the current top seller of home movies, and content is always a deciding factor in any format battle.

The latest development in the high definition disk format war also impacts the console wars as well.  Microsoft has backed the HD DVD format and has showed no signs of supporting Blu-ray any time soon. 

"It should be consumer choice; and if that's the way they vote, that's something we'll have to consider," Albert Penello, group marketing manager for Xbox hardware said when asked [via Reuters] whether Microsoft would support a Blu-ray DVD accessory in the event that HD-DVD failed.

With that being said, it is our opinion that Microsoft will never release a Blu-ray accessory for the Xbox 360. 

Here's why:

Development Costs & Licensing:

You have to give credit where credit is due, and by all accounts, the Xbox 360 HD DVD accessory was an astounding hardware and software engineering feat.  If Microsoft were to undergo a similar exercise for a Blu-ray player accessory at this point in time, it would never be able to profitably compete with the price points of dedicated Blu-ray players upon its release.  Also consider that the price point for the Blu-ray accessory combined with the Xbox 360 console would need to be competitive to the current $400 PS3 model.  If it was not priced competitively, the Xbox 360 would risk being perceived as having less value compared to the PS3. 

Unlike games bought for the Xbox 360, Microsoft would not make any money from the Blu-ray movies themselves.  Video games would continue to be pressed to DVDs, as Microsoft cannot divide the Xbox 360 platform base.  If Blu-ray does in fact become the high definition disk storage format of choice, you can bet that Microsoft will consider it in the third generation of the Xbox platform, just not as an Xbox 360 accessory.

Finally, why would Microsoft open up their direct channel to the Xbox 360 user base that they have spent millions of dollars building up over the years?  They would not receive any licensing for the Blu-ray disk movie content, while Sony would.  This leads us to our next reason... 

Xbox LIVE Marketplace:

Bill Gates has stated that he sees the current physical storage formats (HD DVD and Blu-ray) as the last to be developed.  Downloading and streaming will be the future channel for content distribution.  Microsoft is clearly positioning the Xbox (and Zune) platform for this future with Xbox LIVE Marketplace leading the way.  As you probably know, standard and high definition movies are currently available to download.  The only major stumbling block with movie downloads on Xbox LIVE Marketplace is the lengthy time it takes to download.  Hopefully in future iterations, you will be able to browse the movie selections and simply hit play.

Tech Bullet Point:

The Xbox 360 HD DVD player was clearly developed and released to show Microsoft's support for the HD DVD format, but also to combat Sony's PS3 Hi Definition Blu-Ray player bullet point.  In a similar manner, Microsoft updated the Xbox 360 dashboard/firmware to support 1080p resolution to match the PlayStation 3’s capabilities.  Microsoft was able to release the Xbox 360 a full year ahead of Sony, while not having to commit to either format and bear the cost for that choice.  Going forward from here, Microsoft can point to the ability to download high definition movies and TV shows via Xbox LIVE Marketplace.  This was highlighted during CES as Microsoft announced ABC television and MGM will both offer HD videos.  Both of these studios are aligned with Blu-ray.

So, what do you think?  

Will Microsoft release a Blu-ray accessory?  

We doubt it...