Peter Moore has clarified the speech he gave at CES regarding the external HD-DVD drive for the Xbox 360, saying that it will only function for movie playback at this stage, and there are no current plans to offer games on HD-DVDs.
In the past, console manufacturers have fragmented their system install bases by introducing optional optical disc drives after a system’s release. Devices like the Sega CD and the TurboGrafx CD-ROM allowed systems to run superior games. But splitting the console base between basic systems and systems with CD support made the CD systems less attractive for content developers that prefer to develop for a single platform with a large installation base. Peter Moore clarified to GameSpot that the new external Xbox 360 HD-DVD drive will be used for video only, not games.
“Right now it’s focused purely on movie playback. Think of the drive as something that lets you play high-definition movies on the Xbox 360.” The external drive will function as an alternative to purchasing a separate HD-DVD playback device: “If you want to watch HD-DVD movies and if you own an Xbox 360, there will be no reason for you to go out and buy another player.”
Microsoft has considered the benefits of HD-DVD for games, but Moore is confident that the current Xbox 360 system and Xbox Live service are fine for next-gen gaming. “HD-DVD from the gameplay point of view is primarily about media storage as is of course Blu-ray,” he said. “Our developers are very comfortable with the [Xbox 360's] storage options–I think they’re utilizing Xbox Live very creatively, and the hard drive, we have a very strong attach rate for the hard drive.”
Microsoft hasn’t announced a price point for the HD-DVD drive or possible system bundles, but Moore made it clear that Microsoft will not create a new Xbox 360 with a built-in HD-DVD drive. “If you actually built a HD-DVD new Xbox 360, that fragments [the installation base] even further. So the idea of having an external peripheral is far better to keep the user base consistent rather than build yet another Xbox 360 that has HD-DVD built in–that means millions of people won’t have that.”

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