DF: Blu-ray makes no sense for Xbox 360

News this morning suggests Microsoft CEO Steve Ballmer has done it again, pre-empting official announcements by confirming to Gizmodo that the company is planning a Blu-ray expansion drive for the Xbox 360.

When asked if forthcoming 360s will get an internal Blu-ray drive, he replied: "Well I don't know if we need to put Blu-ray in there - you'll be able to get Blu-ray drives, can get Blu-ray drives as accessories."

It looks self-explanatory out of context, but then context is king, and if you watch the original clip it's easy to reach the conclusion that he was talking about buying yourself a separate player for the lounge if you fancy a Blu-ray player, and simply used the magic word "accessories" by accident. Especially as he then talks about video-on-demand being the future in the next sentence.

That said, there's no technical reason it couldn't happen. Assuming an external drive similar to the ill-fated HD-DVD add-on, the technical challenges of bringing Blu-ray to the Xbox 360 are significant, but most of the legwork has been done already. The HD-DVD codebase within the 360's dashboard features support for the same MPEG2, h264 and VC-1 codecs found in the Blu-ray spec.

The only question mark concerns the throughput levels the code is capable of: HD-DVD handled 30Mbps max, while Blu-ray ups the ante to 50Mbps. At the time of the HD-DVD add-on's launch, Microsoft talked about how a combination of both CPU and GPU power was required to handle the decoding. Assuming there's no overhead in the code, it could require significant re-engineering to get it up to BD specs.

Even then, Microsoft would be in the unenviable position of having to charge a premium for a BD playback solution fundamentally inferior to PlayStation 3 performance, most notably due to the limited surround sound options in the lower-spec HDMI 1.2 controller found in the Xbox 360.

Over and above that, Microsoft's strategy thus far has been to say that gamers don't need Blu-ray, and any kind of expansion device would suddenly be suggesting the opposite. Far from offering more value to the Xbox 360, it would immediately make the keenly priced all-in-one PS3 Slim far more of an attractive proposition. Validating Sony's decisions isn't Microsoft's style.

As for games arriving on Blu-ray for Xbox 360: forget it. Some figures bandied about at the time put the penetration of the HD-DVD add-on at a mere three per cent. A BD device would probably be more popular, but the take-up would still be far too low to risk muddying the waters with games available on multiple disc-based SKUs.

In a sense, the Xbox 360's reliance on DVD has defined the storage threshold for this generation. The vast majority of its first-party titles use just the one disc. Third-party cross-platform titles are, with the odd exception, invariably targeted towards the 6.8GB storage limit imposed by the Xbox 360 DVD, to the point where even the PS3 versions are much the same size. The success of the Microsoft console has defined the size of almost all cross-platform games this generation, effectively making the 25GB and 50GB storage limits of Blu-ray superfluous.

In terms of HD movies, Microsoft probably reckons its download-only strategy stands just as much of a chance of success as Blu-ray over the longer term as broadband streaming speeds increase. Its service is also inherently more suitable for the Xbox platform: it's immediate, it's available to all Xbox 360 owners out of the box, it adds value to Xbox Live, and, crucially, Microsoft will make more money from it. Releasing a BD peripheral gives the firm no recurring revenue stream and effectively share-steals from its own services.

Moving into the next generation, all bets are off. The next Xbox will require a higher level of storage and by the time that comes about, a Blu-ray drive will be the cheapest way to deliver that. In the here and now, any kind of move into the BD market would be too little, too late. And besides, Xbox 360 seems to be doing well enough without it.