I’m not going to put this one as high up as some other articles/reports, but I was just sent a link to an MCV UK interview with Chris Lewis, VP of Microsoft Interactive Entertainment Europe.  The quote… 

“We have no plans to do anything at all in terms of further or additional movie playback peripherals.”

While I firmly believe Microsoft will not offer Blu-ray, I can’t put to much stock on Lewis’ quote considering the rest of the article revolves around quotes like “My own view is very clear…” and “My own sense…”  I don’t know Mr. Lewis’ job responsibilities, but it doesn’t sound like he would be involved in such decisions anyway.  That said, as I've talked about in the past you would think such an idea would already be past the planning stages unless Microsoft is planning on offering a Blu-ray solution a year or so before the next console launch.

Of course his quotes do yet again reinforce that Microsoft is already in the download business with 1080p downloads direct to the Xbox Dashboard.

Thanks Warren!