Those folks at Sony are the biggest kidders, to liberally paraphrase Xbox 360 product manager Aaron Greenberg. Greenberg just told Reuters that Microsoft is in fact decidedly not in talks with Sony to do anything whatsoever with Blu-ray and the Xbox 360.

Instead? Focus on online distribution of content, i.e. directing Xbox 360 owners to Xbox Live's hundreds of downloadable TV shows and programs.

In case you missed it, last Friday a Sony executive suggested to the Financial Times that Sony and Microsoft were in talks about the Xbox 360's Blu-ray future. Needless to say, Microsoft's response was "We have made no such announcement." Now, via Greenberg, they've gone one further to effectively quash speculation that talks are occurring at all. Pay attention to our online distribution model instead, says Microsoft. Optical media? Who needs optical media when you can download TV shows and movies direct?

My response: Fine, fair enough, but let's keep it real here. For all Microsoft's claims about offering "high-definition" content, the company is simply dreaming if it thinks it can compete with Blu-ray at the pixel-for-pixel level. Microsoft knows it, and so does any videophile. Imagine trying to download the BBC's Planet Earth, something like the Harry Potter Collection, or frankly any single given 1080p movie. For the record, Microsoft's existing service tops out at 720p, the movies have to be downloaded (as opposed to streamed) and each one takes up a whopping 4-5 GB space with no recourse to burn and store on the side. Can you say yikers?

Not only will more than a handful of movies chew through what little space is available on your average Xbox 360's hard drive, they simply take forever to download. Want the latest movie-of-the-week? You can either trigger the 4-5 GB download, or you can hop in your car, rent the movie for $5 or buy it outright for $20-$30, then be home and have it watched by the time the download's a third complete.

I'm just not convinced online distribution mechanisms for film-length 720p or 1080p content are mature enough to get around the need for a physical optical drive. Eventually, probably -- when we can either offload that content to instant-recall backup media or internet speeds are so fast backups no longer matter -- but the digital infrastructure isn't close to ready. On my 7 Mbps DSL connection, it can take upwards of half an hour to download 100MB Rock Band music packs if Microsoft's servers are running slow (they often seem to be).

Do the math. Using services like "OnDemand," I can cue up the entire first season of Curb Your Enthusiasm on my cable box connection in HD in seconds. Microsoft's enemies are time and space, and I don't see either the 360 or PS3 obsoleting Blu-ray or cable/satellite or services like Netflix with regard to either dimension in the near future.

Long story short, don't worry Xbox 360 owners. Reality is completely amorphous when it comes to public relations. If a company says no on Friday, there's a 50-50 chance they'll say yes on Monday. All this announcement tells us is that someone picked up the phone and told Mr. Greenberg to stay on target with "digital distribution," even if its a message that rings a little hollow to someone like me who's finally ready to start up-converting to incontrovertibly glorious-looking 1080p HD.

-pcworld

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i hope they dont i dont want to have to pay 600 dollars for a system and 250 dollars worth of it(the blu-ray) is not really worth it unless you have a HD tv or want to pay and extra for blu ray dvds to watch...personally.. ..the graphics on the 360 are good enough for me...i would never pay 600 or even 500 for a ps3 cause they will never have anything like xbox live which is really the only reason why i and most people play video games anymore

I think blu-ray is the way that home entertainment should go. I have a ps3 and a high def tv and blu-ray outshines ANYTHING i've ever seen on a television. The graphics on ps3 are incredible. Depending on the game it can honestly look life-like. A ps3 is defiantly worth every penny i spent on it. I also have a psp and they are gonna start making blu-ray UMD's for it. Also PSN is just as good as XBOX live, its offers a chat system, friends list, and also availabilty for downloadable content. What more do you want?? U get what u pay for is basically it, besides xbox elite which only offers more GB the ps3 is more expensive because u get a superior machine. Bottom line. Either man up and pay it or dont. But dont knock it because u cant get it solely on price. PS3>XBOX

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