"Xbox 360 to explore alternatives for distribution of games on next-gen optical disc formats?

The battle lines have been drawn between Toshiba's HD-DVD and Sony's Blu-Ray in the showdown for next generation optical storage, but Microsoft is not convinced either format will overcome online digital distribution. Chairman Bill Gates expreses this sentiment during his speech at the Howard University in Washington D.C. last week, explaining that delivery of content like games can be far better served over the Internet onto trusty ol' hard drives large and small.

''The format that’s under discussion right now, HD versus Blu-ray, that’s simply the last physical format we’ll ever have. Even videos in the future will either be on a disk in your pocket or over the Internet, and therefore far more convenient for you.''

As suggested by many sites, this could point to increased interest on Micrsoft's part to expand their Xbox Live! online gaming service in the future to deliver much more than we currently expect. However, Gates did admit that this vision could prove to be quite the undertaking given that broadband Internet has yet to see widespread adoption in North America." [link]