Some say Microsoft chose poorly when they backed Toshiba's HD DVD standard, and that had Microsoft backed Blu-ray instead, there wouldn't have been much of a format war. There's another group, including Michael Bay, that thinks Microsoft intentionally chose a standard that they didn't think would win in an attempt to undermine consumer confidence in disc formats altogether. Why?
So they could build up their HD content on their digital distribution service:
"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."
If this works, Microsoft might stand a good chance of leaping ahaead of rival Apple.