Should Blu-ray be Supported on Xbox?

The size of games have grown with each generational leap. Games were typically less than a gig (with the exception of RPGs) during the PS1 days. They grew to 2-4 GB over the last generation. And now games predominantly run over 4 GB on PS3 and Xbox 360.
With the failure of HD-DVD, Blu-ray has emerged as the clear and popular choice for delivery of HD media content. During the design of the Xbox 360, Microsoft rightly decided to hedge their bets by offering HD-DVD support only as a $200 add-on rather than a built-in feature. They kept DVD as the storage medium for games and the strategy has worked for them so far. But will this continue successfully into the next generation? Or should Blu-ray be supported on the Next Xbox?
Blu-ray has been arguably a success for Sony. The biggest advantage of Blu-ray is also the most obvious -- 50 GB of storage space. Extrapolating from the growth trends of prior generations, the average size of future games are likely to exceed 9 GB. Triple A titles for the next generation may consisently max out Blu-ray capacity. Present triple A titles like Metal Gear Solid 4 (46.6 GB), Resistance: Fall of Man (22 GB), and Uncharted (24 GB) fit comfortably on a Blu-ray, but concessions must be made if they were ported over to DVD. Double layer DVDs typically store around 8-8.5 GB.
As an example, Final Fantasy XIII producer Yoshinori Kitase stated the 360 version will have the Japanese audio stripped due to space limitations, leaving the PS3 Blu-ray version as the only one to have dual language voice tracks.
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Partnering with Netflix, Microsoft introduced video streaming to subscribers. Digital delivery of HD content is an exciting option for some but is hampered from fully taking off in the mainstream due to present market conditions. Current bandwidth caps enforced by internet service providers cripple any hope of a fully digital marketplace. A paradigm shift will come in the future once there is enough demand to drive down the cost and price for internet broadband and in turn release bandwidth restrictions.
The foundations for a digital infrastructure are being built right now, so the future is still uncertain. All three companies have dabbled with digitally distributing small games through WiiWare, XBLA, and PSN. Recently, Sony experimented with releasing a major PSP title, Patapon 2, solely through digital distribution in order to explore market viability. It won't be a surprise if the big three will make an even harder push in their next console iteration. But given the large file size of console games, large scale digital distribution may not be possible until two generations from now. Meanwhile, handheld and smaller size games will proliferate in the next generation to help prepare and grow the infrastructure.
In losing the format wars, Microsoft suffered a costly investment in HD-DVD and will not likely finance the development of another media format to go against Blu-ray. Formats shifts occur only once every 8-12 years and disc-based storage may have seen its last hurrah with Blu-ray. Developers will cry out for larger disc space and Microsoft will have no choice but to include a Blu-ray drive in its next console, buying time until digital distribution has matured.
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