
The entertainment industry as a whole, ranging from music, movies and videogames, in one full of misunderstood concepts and business politics. Sometimes to ensure success, a corporation would do under the table deals in hopes that the public doesn’t learn about the activity, all legal of course.
One company that has been under the speculation of this sort of transaction is Microsoft. From many people’s analyses, Microsoft is favoring HD DVD for the sole reason because they want both formats including Blu-ray to fail. By doing this, it would allow them to bring in digital downloads as the newer video media form.
Michael Bay, an outspoken Hollywood individual had this to say:
“What you don't understand is corporate politics. Microsoft wants both formats to fail so they can be heroes and make the world move to digital downloads. That is the dirty secret no one is talking about. That is why Microsoft is handing out USD 100 million dollar checks to studios just embrace the HD DVD and not the leading, and superior Blu Ray. They want confusion in the market until they perfect the digital downloads. Time will tell and you will see the truth.”
So could this also be the reason why Microsoft created the HD DVD add-on for the Xbox 360? It’s a possibility, but with Blu-ray currently in the lead, we could be seeing a definite winner in Sony’s high definition format, thus thwarting Microsoft’s plans if they are indeed true. link: http://www.psu.com/Microsoft-wanting-both-Blu-ray-and-HD-DVD-to-fail--a0002084-p0.php

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Well, it's rather obvious that MS wants them both to lose because they've put most of their money and focus on digital content and 360 lacks any built-in HiDef drive (BD or HD) so of course they want them both to lose.
watsup dude nice to see ya u having a nice day =]
Microsft isnt Sony in the Entertainment industry... they will lose... not everyone wants on digital distibution.... I sure don't.
First off, I can see this as possibly being true. I mean think about it. What has microsoft REALLY done to help their HD DVD camp against Blu-Ray?
Ok, they have the add on HD DVD drive. But have you ever seen them promote it?
I have yet to see a single mainstream T.V. commercial to at least hint to the HD DVD add on's existence. Part of the reason that HD DVD is losing isn't because of MS not adding the drive to the console themselves, its the fact that they don't even try to push the add-on drive.
Second, do you realize the kind how fast the average pc will have to be in order for digital distribution to become a proper replacement?
Third, you have to keep in mind, millions of us are collectors of our movies and t.v. shows. The average harddrive will have to be ALOT of Terabytes just for some people to keep a quarter of their physical collections digital.
In other words, the world just isn't ready for that all that right now. Remember folks, this is just one man's opinion. So please no whining, crying, and fanboying lol.
Maybe why they don't have an internal drive is because they are waiting to see which format actually wins. I don't believe the digital bit for one reason. They have a miniscule hard drive on most of their systems, with a couple of exceptions. 20 gig would go fast.