Citing unnamed sources, that the console unofficially known as "Xbox 720" will launch around Christmas 2013. The console will use Blu-ray and therefore be able to store much more data on a single disc than it currently can on the DVD format in the current Xbox 360, and of course it will be able to play high-definition Blu-ray movies.

Microsoft launched the Xbox 360 in 2005, before Blu-ray was a viable format. Microsoft released a standalone HD-DVD player for the console in 2006, but discontinued it after Blu-ray won the format war. Although rumors of a swirled for , a product never materialized.

I don't see why Microsoft wouldn't put a Blu-ray player in its next console. Blu-ray is now undisputed as a high-definition optical media format, and prices have come down considerably since Sony's competing Playstation 3 launched with Blu-ray support in 2006. Sony is part of a consortium that , but a rivalry isn't a good enough reason for Microsoft to resist the technology at this point.

The bigger question is to what extent Microsoft and other console makers will emphasize optical media in the first place. As VG247's sources claim, the next Xbox may require a constant Internet connection to play games, and that the console may have a way to lock out second-hand games. Kotaku has reported that Sony's next console, , may have similar restrictions.

I have my doubts that Microsoft and Sony will completely shut out offline gamers and attack the used game market so aggressively. But we've also heard reports that Microsoft may launch a smaller new Xbox model . To me, that seems likely as a way for Microsoft to compete with the Apple TV and Roku.