Partly because they wanted to see who wins the war, when the current 360 was designed, it was pretty close, at the moment, the PS3 has made a big impact on the world as a blu ray player, (because there are no games), so it's winning. And partly* because they want your money. As it stands Microsoft support HD-DVD, hence the production of an external HD-DVD drive. It's just a business decision, they had two ways to play it from the start. They could include the HD-DVD, which later flops and theya re a left with a good console which heads the way of the dreamcast. Or, they could not include it, and make an peripheral drive, which is released around the same time as the PS3, as a competior, yet, if it flops, they can make a blue drive with fairly little effort, and in no time at all, they are an a near level playing field. This makes it more expensive for us, but ultimately, it means we have the best console capable of either format, unlike the PS3, who might aswell be running cartridges. The PS3 is great deal, sure it costs more, but for what you get, add all that shit to a 360 and it will all stack up. It's just that there are no games at all, yet. M$ won't change the strategy, this is just another money making change. *read: mostly