After it turned out Microsoft had backed the wrong high-definition horse, people began speculating how long it would be before the Xbox 360 would get Blu-ray capabilities, be it a new SKU with a built-in drive or more likely an external drive similar to the HD-DVD add-on. Microsoft has continually denied any rumors that they plan on using Blu-ray for the Xbox 360. Robbie Bach gave an interview to Todd Bishop of FlashTech at Microsoft’s booth at the CES. Bach is the president of Microsoft’s Entertainment and Devices Division and in the interview he explained the reasons why we won’t see a Blu-ray player for this generation of Xboxes.

Bach explained that first and foremost there is very little demand for a Blu-ray player: “when you ask people the list of things they want to see us spending time creating in Xbox, Blu-ray is way, way down on the list.” He also points out that a Blu-ray drive would be of no use for developers. Even though a Blu-ray disc would greatly expand the storage capacity that Xbox games have, allowing for higher quality visuals, more intricate textures and more content in general, it would severely limit the number of people purchasing these games.

There are twenty-eight million Xboxes that have already been purchased or shipped, none of which currently have the capacity to utilized Blu-ray technology. Even if Microsoft did release an external drive, there would be no guarantee that people would purchase it, and developers would be hesitant to create Blu-ray Xbox games.

While Microsoft might be sticking to their new ‘digital download’ guns as far as video content goes, by the time the next Xbox comes out it will likely have Blu-ray capabilities, or at least some other comparable technology, if only because DVD storage will be insufficient for the games of the future.