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Microsoft's Kim: No Blu-ray Drive Coming for Xbox 360

19 May, 2008 By: John Gaudiosi

SAN FRANCISCO — Microsoft has nothing in development for any type of Blu-ray Disc add-on for the Xbox 360, said Microsoft Game Studios head Shane Kim, head of Microsoft Games Studios, during a roundtable at the company's 360 Spring.

Microsoft had backed competing high-def format HD DVD with an add-on drive, which has since been discontinued. The internal drive of Xbox 360 uses a standard DVD format.

“I know Blu-ray provides some visual boost for people who want a physical HD format, but we're not seeing that format taking off, in general,” Kim said. “The DVD format is still doing well. Eventually, the price of Blu-ray players will come down to $150 and the value proposition of a $300 or $400 PlayStation 3 as a game console and movie player will be impacted.”

Kim said Microsoft's focus for standard definition and HD movie, TV programming and gaming content is solely on its download service Xbox Live Video Marketplace. Microsoft, which does not break down movie downloads or TV purchases, has had over 380 million pieces of entertainment, including free game trailers, demos and movie trailers, downloaded through the service since launch.

“Video Marketplace helps us to speak to the more casual gaming audience,” said Kim, who added that he believes Microsoft chose the right strategy for distribution of entertainment via Video Marketplace. “There's a lot more to our brand than just hardcore games.”

When asked if Sony Pictures content would ever appear on Microsoft's Video Marketplace, Kim responded, “I hope so.” He went on to say that with all of the different divisions within Sony Computer Entertainment and Sony Pictures, it's hard for him to figure out exactly how that company works between the entertainment and game divisions.

Sony is launching its video store service, which is expected to offer movies, TV shows and music for download to PlayStation 3 through the PlayStation Network, later this year. Sources inside Sony has said that this service will include all of the major studios, including Sony Pictures. In the meantime Microsoft has had great success with its Video Marketplace, which now reaches over 10 million consumers, according to the company. It's currently the No. 1 online digital distribution service for consumers.

Kim said that this digital distribution business is one of the reasons Microsoft is so keenly focused on Sony, and not Nintendo, when it comes to the current console battle, which is essentially about controlling the living rooms of the world. Microsoft is also singling out that casual audience that Nintendo has courted with Wii with new Xbox 360 games like Viva Pinata: Trouble in Paradise and Banjo Kazoo: Nuts & BoltsM, both due out this fall.

“I'd love to get Xbox 360 to the 100 million unit mark as Sony has done with both PlayStation and PlayStation 2,” Kim said.

The way to achieve that is through exclusive game content, which Microsoft has done with its “Halo” and “Gears of War” franchises. Epic Games' Gears of War 2 is heading to Xbox 360 this November, and Microsoft also has the much-anticipated Fable 2 due out this fall. Both of these games, like Halo, have the potential for crossover success with both the core gamer and the more casual audience. Ninja Gaiden II, due out June 3, also has some crossover potential.

“According to GameStop, 65% of GTA IV games sold on Xbox 360, and I think a big reason for that is the exclusive expansion packs that will be coming beginning this fall,” Kim said. “Right now, the market requires big games like GTA IV, Guitar Hero and Rock Band to make digital distribution viable. But as consumers get accustomed to buying additional content for games, it's good for the industry because in addition to adding another revenue model for publishers and developers, it may mean fewer games are sold back to used game retailers because owners will want to hold on to them longer.”

Kim said slowing down the sales of used games is important to the industry because only retailers, not the publishers or developers, recoup any money from used game sales.

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