At this point I’m either setting myself my for a huge fall or I’m exactly right, I’ll still let you be the judge of that but the more I think about Microsoft doing Blu-ray for the Xbox 360 (internal, external, new SKU, etc) the more it still doesn’t make any sense.

If you haven’t already, read some of my other posts where I have said that a Blu-Xbox 360 isn’t going to happen.  However, it seems that more reports are coming out that are attempting to hint that it will happen.  I’ve already covered the post by the The Financial Times, but now the Seattle Post has a quote from Steve Ballmer that people might be taking too far.

"We've already been working on, for example, in Windows, device driver support for Blu-ray drives and the like, and I think the world moves on. Toshiba has moved on. We've moved on, and we'll support Blu-ray in ways that make sense." - SB

A device driver has nothing to do with playback nor does it really fall under the category of “support” like most people are thinking.  This simply means that Windows will now recognize the file structure on a Blu-ray Disc and display a BD icon in Windows Explorer (Matt pointed this out in the comments of my post last month).

“We'll support Blu-ray in ways that make sense” is the key statement.  I’ve previously run down my reasons why I don’t think it makes sense, but since several people don’t seem to be happy with those here are a few more.

Microsoft sold 300,000 HD DVD add-ons to a potential 18 million Xbox 360 owners.  Assuming my math is right, this is less than 2% of owners.  People might be “demanding” Blu-ray because it’s a buzzword, but it just doesn’t make sense for Microsoft to support it in the Xbox 360 with such a small market following.  As I’ve said before a price cut would most likely be more beneficial here, along with fixing the rising RROD issues (more popular buzzword then Blu-ray).

Another issue is building such a player to spec, something Microsoft will have a hard, or rather near impossible time doing.  Unlike HD DVD’s hardware specs (PL1), Blu-ray requires that all players support multichannel PCM out.  The Xbox 360 can’t do this with current hardware (no software update fixes that), nor does it have HDMI 1.3 to directly output the bitstream of advanced codec’s like TrueHD.  Would the BDA let Microsoft make a player that is not built to spec just because they are Microsoft?

Edit: I've been offered the question if Blu-ray requires players to decode and output LPCM, or just decode (and then say convert to another format).  I'm trying to think it through, but I'm really not sure so I might be completely wrong on that point.  If decoding is the only required part, then it would work link the current Xbox 360 HD DVD add-on.  I mistakingly used output and decoding as one.

I still don’t get it, for those telling me that Microsoft needs Blu-ray to "compete" with the PS3, are you going to buy such a unit at its high price when it can’t output anything better than DTS, when it isn’t built to the latest Blu-ray Profile (or any of them) when the PS3 is still cheaper and can do almost all the above?