Unnamed sources claim that Microsoft may opt against Blu-ray movie playback with the upcoming Xbox 720/Next/Infinity despite the next-gen console having a built-in Blu-ray player. The drive may only be used for Xbox games, and could supposedly block store-bought movies – possibly even DVDs.
When Microsoft launched the original Xbox in 2001, the company also released a standalone, optional DVD playback "adapter" that came with a remote control. This device essentially "unlocked" the console's DVD movie playback feature, and was obviously a gimmick to score additional revenue from loyal customers (talk about disgruntled).
When the Xbox 360 launched, Microsoft left the ability to play DVD movies intact, but competitor Sony had something better in its PlayStation 3 console: a Blu-ray player. To compete, Microsoft launched a standalone HD-DVD player that connected to the console, but the format lost to Blu-ray's popularity, and Microsoft quickly discontinued the drive.
Still, cutting Blu-ray playback from the upcoming Xbox wouldn't be surprising. After all, the Redmond company did something similar with Windows 8, ripping out DVD and Blu-ray movie playback in favor of charging customers for Media Center which essentially enables those very features. That may likely be the case with the new Xbox: you must pay for the luxury of playing Blu-ray and DVD-based movies.
But completely barring consumers from playing their physical media in the next console would be a bad move on Microsoft's part. It would also seemingly go against its "central entertainment station" philosophy. The new console will supposedly be an even more centralized place for all your entertainment needs, including television. Forcing customers to use a different hardware set to play their Blu-ray movies would be like escorting business to Sony's PlayStation 3.
Looking ahead, it would not be surprising if DVD and Blu-ray movie playback was only enabled with a subscription to Xbox Live Gold. Microsoft already applies this ridiculous restriction to services like Hulu Plus and Netflix, subscriptions that customers pay for outside Xbox Live and can access without additional taxation on the PlayStation Network.