The real reason Microsoft won't bring Blu-ray to the Xbox: HDi

Terrence Russell — Fri, 21 Mar 2008 08:29:01 -0700

Think HD DVD's loss means Microsoft is going Blu-ray for the Xbox 360?

Guess again.

Company executives may have already shot the notion down, but there's more to the story. With HD DVD, Microsoft had the opportunity to inject its own technology into the emerging high-definition video market. But now that the HD disc war is over, the company still has a viable group of HD video assets, including HDi and Xbox Live Marketplace.

If you take a close look at these assets, and consider their potential, it's clear why Microsoft is snubbing Blu-ray for the Xbox: The company is gearing up for another HD video assault.

First, a little backstory. Beneath the surface of the recent HD DVD/Blu-ray hardware war, a battle over programming platforms was waged. In this clash, the two camps were at odds over how to implement next-gen features like interactive menus, HD picture-in-picture, and Web-powered content such as online polls. The Blu-ray camp ultimately went with the Java-based BD-J platform, while HD DVD went with an XML dialect.

Microsoft stepped up to deliver iHD (later renamed HDi), which was a trademarked implementation of HD DVD's XML markup language. Toshiba liked it. They made HDi functionality a standard for HD DVD players, and eventually partnered with Microsoft to expand HDi's reach by founding the Advanced Interactivity Consortium. The primary goal of this group was forging industry relationships to further promote HDi in emerging outlets like downloadable and streaming media.

The deal gave HD DVD its competitive next-gen features, but here's the rub: Microsoft didn't need physical media to implement HDi. All of HDi's interactive bells and whistles could theoretically be applied to downloadable video content, as long as a runtime environment was available. Even as the disc format war raged on, elements of HDi's runtime environment showed up in Microsoft products like the Xbox 360 and Vista.

HDi-on-a-disc may now be dead, but the technology certainly isn't. A Microsoft developer told me that the company's HDi crew hasn't been disbanded. Microsoft was apparently quite pleased with HDi's performance, and is currently exploring applications on other platforms.

Meanwhile, Microsoft has been expanding the HD video capabilities of both Vista Media Center and Xbox Live Marketplace. The Marketplace's HD content library is modest today, but the software giant clearly has plans to change that.

So, let's put everything together.Microsoft has a popular gaming console and an operating system that are HDi compatible. It also has a group of developers working on HDi applications, and a 360-accessible HD video library that could feasibly be outfitted with next-gen interactivity features. All that's left is the dog and pony show needed to convince content providers that HDi-enhanced content and Microsoft's video outlets are key to making HD video downloads a viable revenue stream.

It would surely be an expensive gambit for Redmond, but the chance to rule the HD download market may be too juicy a proposition to pass up.

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