Microsoft is shifting its attentions to digital downloads
Microsoft has no plans to release a Blu-ray add-on for the Xbox 360 and is instead backing digital delivery, the head of Xbox in the UK has said.
Microsoft stopped production of its HD-DVD player following the decision by Toshiba, the format's creator, to concede victory to rival Blu-ray.
Microsoft's Neil Thompson said physical media would give way to downloads in the next two to three years.
"We have always said online is the way to go," he said.
He denied that Microsoft had abandoned customers who had purchased the HD-DVD add-on for their Xbox 360 consoles.
"We said to people they had the choice; we didn't force it on them as we didn't put it in the box," he said.
He said Microsoft had always planned to shift its focus to digital distribution of content.
"Our belief was that in the lifetime of the Xbox 360 we were going to move to this online world and online distribution for content outside gaming.
"If we didn't believe that we would have put a hi-def player in the console.
"But there was a time gap of us launching and getting to that world. We knew certain of our customers would want a hi-def format and we thought the most cost-efficient way of doing that was going down the hi-def peripheral route."
More than 300,000 HD-DVD add-on drives are believed to have been sold to Xbox gamers.
Mr Thompson said offering a Blu-ray player to Xbox 360 gamers would not be the best use of resources for the firm.
"We think it's better to focus our efforts and resources on developing services in the digital domain," he said.
He added: "More and more people are consuming more and more hi-def and standard-def content online. The expansion and growth of consumption of digital content is exponential."
Microsoft has been criticised for the variety of downloads on its online video service in the UK.
Mr Thompson said the firm would be adding more content and announcing new partners throughout the year.