If the next generation of Microsoft's Xbox gaming system will be designed to bring us well beyond 2020, why would it still rely on last century's technology, spinning discs, for games?

Videogame blog Kotaku reported yesterday that the next Xbox - still not yet announced by Microsoft - will support Blu-ray discs, and may incorporate some sort of technology that prevents users from playing used games.

Isn't a more future-thinking move to skip discs altogether and switch to an Internet powered game store?

As Apple's iOS App Store has shown, there's huge interest in downloadable games, both on behalf of consumers and developers. You can bet that if Apple's living room devices, either a proper Apple television set, or today's Web set-top box, ever support gaming, there won't be discs involved. And Microsoft itself already supports some downloadable games for the Xbox today, and Windows 8 apps tomorrow, plus plenty of streaming video.

So why not move the entire Xbox platform in that direction? That would give Microsoft complete control over game sales and distribution: No more dealing with physical disc inventory, dingy game retailers, or the pesky used-game market at all. That's the way the movie industry is moving, the PC industry and the handheld gaming market. So why not consoles?

If the next Xbox really will rely on Blu-ray discs for games, my guess is that the reasons are bandwidth first, storage second and movies third.

Bandwidth, Storage and Movies

Regarding bandwidth, Kotaku notes that Blu-ray discs can contain 25-50 GB worth of data, versus 9 GB for DVDs. Over the average U.S. home Internet connection, that could take several hours, or even days, to download. At that point, running out to the local game store is actually faster than downloading the game, especially if it's a brand new game and you want to play it soon after it's released.

And if more ISPs eventually start limiting how much bandwidth you can consume per month, or charging by the gigabyte downloaded, Microsoft could also hedge against that by using discs for games.

Then there's the storage issue. If you have 5 or 10 games sitting around, taking up 25-50 GB each, that's a pretty big hard drive you'd need to include in the standard Xbox 720, or whatever they'll call it. Storage is getting cheaper, but it's still a cost to figure into the pricing equation.

Plus, the addition of Blu-ray support would make the Xbox a better movie machine, perhaps the main advantage the PS3 has enjoyed over the Xbox 360. While streaming movies are the future, and even today's Xbox is set up to take advantage of that, Blu-ray isn't a total flop: Some 33.5 million homes in the U.S. had Blu-ray at the end of September 2011, up over 50% year-over-year, according to DEG, a trade group. That's about half of the roughly 70 million U.S. households with HDTVs. Blu-ray disc sales also grew 58% year-over-year in Q3 2011.

Some combination of these reasons could end up encouraging Microsoft to support discs, specifically, Blu-ray, for at least the next generation of videogame console. The future is probably downloadable or streaming games, but until we get better bandwidth, it's not practical for everyone yet.