I'm completely for Microsoft's stance on not incorporating an integrated high-definition drive into the gaming console. In the long run, it seems to make much more sense to have it external. Drive lasers have life expectancies. Sony incorporating a high-definition movie drive into a gaming console ensures us that the laser life expectancy is just cut in half, meaning half the time playing games before it craps out, and you need to send it in for expensive repairs, or buy a new one (granted you watch as many movies as the games you play).
Microsoft, on the other hand, seems to be working towards preserving the drive and console as a gaming machine with a significantly longer life expectancy (setting aside the RRoD crap, which will hopefully be phased out by the end of 2008).
Granted Blu-Ray wins, I don't think Microsoft should worry with creating a mixed-media high-definition drive, or an external Blu-Ray drive. Instead, I think they should stick with what they're supposed to be good at, and work hard at making the download-able media great. I don't particularly like the way it's being handled, with DRM and what not, but if there was a DRM-free future with the ability to purchase media and maintain it, permanently on a storage device, I would be greatly pleased.
Imagine my modified xbox1 as a high definition media player, with all of my movies easily accessible right from my hard disc drive... That's what I want.
The life isn't going to drop a whole bunch because it can play movies. Many people use their PS3 and 360s as their DVD players anyways. By the time the drive dies, the system will be cheap enough to buy another.
Everyone on this site is so biased. I own both a 360 and PS3 (360 since launch, PS3 this summer).
Everyone here is very biased and probably wouldn't admit that the PS3 has a higher build quality and even a better value for your money (the system itself, not including games).
I hope blu-ray wins, and it will, and once it does Microsoft should make an add-on so that all the anti-PS3 kids can get a good deal on a blu-ray player.