Jeff Bell, VP of Global Marketing for Microsoft's Interactive Entertainment Division, has said "never say never" on the possibility of releasing a Blu-ray drive if that became the consumers choice. He said they have had a long history of partnership with Sony and says they have a 'coopetition', which is a word he learned at MS.

1UP: Microsoft's seen some good success with the release of the HD-DVD add-on for Xbox 360. With Warner Bros. recent announcement to go Blu-ray exclusive, clearly it's not a knock-out punch -- but a blow to the format. How do you see that changing Microsoft's perspective on the ongoing format war?

Bell: First of all, let me say Warner Bros. is a great partner. They are the number one partner in terms of downloadable content with TV shows to own and movies to rent on Xbox Live Marketplace. We were disappointed with the announcement. It has a consequence. I will tell you that we are committed to HD-DVD and still have some great partners -- Universal, Paramount, DreamWorks -- these are great participants in the format. We have sold very well the HD-DVD accessory.

We did make a specific choice; we did not impose technology upon our consumers. We would like choice to be our guiding principle, and it has worked for us. We're not demanding that people choose a format, but rather, we're with DVD in the Xbox 360. Satisfaction with DVDs, by the way, is like 96%, at least in the States. So, we continue to give the alternative in HD-DVD, we have downloadable movies and television shows on Xbox Live Marketplace, Media Center Extender is available and as we just announced, IPTV will be brought onto the Xbox 360, first with British Telecomm in 2008 for consumers. So, there's more than one choice to watch movies and TV shows.

1UP: In the event that HD-DVD no longer becomes a viable alternative in the retail space, how do you think Microsoft will respond to that? Peter Moore had at once said, before you released the add-on, that he was open to the possibility of releasing a Blu-ray drive if that became the consumer choice. Is that something that's still on the table for you guys?

Bell: You know, interestingly, we have a long history of partnership with Sony. Obviously, they run our software on their personal computers and other devices, so we have a 'coopetition' -- a word I learned at Microsoft when I joined. We've been talking to Blu-ray all along because we have the best piece of software in the business, called HDi. It is the backbone that powers interactivity in HD-DVD and we have that available to potentially partner with others.

You never say never. I think we'd like to see how things evolve. Our commitment, however, to HD-DVD is profound and consistent, and we have done very, very well in term of our accessory sales. We have 400 HD-DVD movies from great studios available. It's a long time between now and June.