Rumors are circulating that Bill Gates will announce in what may be his final CES keynote that Microsoft will add HD-DVD to the Xbox 360. Microsoft has presented arguments against doing so in the past, offering that game players should not have to pay for a technology that they don’t need. At the same time, though, Microsoft has gone upmarket with the the 360 Premium configuration, and the addition of a larger hard drive contributes no more to the Xbox gaming experience as an HD-DVD drive would. Microsoft has already reduced the price of the external drive; an integrated one would be a logical next step as the component costs have come down.
There’s also the factor of how many external Xbox HD-DVD drive buyers would have preferred to have the internal drive rather than add another box to a crowded home theater, or how many are resisting purchasing an external drive for that reason. Furthermore, while the tie ratios of Blu-ray movie titles to the PlayStation 3 can be debated, there is ample evidence that many PS3 buyers are purchasing at least a few movies, and the HD-DVD camp simply can’t ignore the high volumes of the PS3 Trojan horse. Integrating an HD-DVD drive into at least one 360 Premium configuration is an opportunity for Microsoft to put its machines where its mouth is.