It was, then Blu-Ray won. Like the VHS vs. Beta fight back in the day, the inferior VHS system won that

*nods*
VHS won out over beta with the VHS vs DVD wars having no contest at all.
Sadly from what i'm hearing Sony is going to make the same mistake they did when they put the blu-ray player in the PS3 making it cost several hundred more dollars than it should have. The rumors circulating around Sony are them switching from blu-ray to a new http://en.wikipedia.org/wiki/Holographic_Versatile_Disc which is going to make their next gen system expensive. However, if $ony can negate the cost they will put up a stiff competition with M$ who will be using bluray if they go that route.
If they part about them not allowing the use of old games/played games then that will be an extreme problem. Though I can see into the minds of those greedy corporate people that are running the show for Xbox.
1. Make it so the game will only run fresh purchased/clean games. It eliminates the ability of people to go over to a friends house and play your games on their console unless you bring your console.
2. For the people like Gamefly they will make specialty games that have encrypted coding in them. This bypasses the safety mechanism allowing that "S.Rented" game playable on your console. You may even have to pay a fee ontop of the game's fee to enable it for use so Microsoft doesn't think you're cheating them.
3. I can already see people getting ideas about copying the code for these games and putting it on their new gen systems. Microsoft will counter this by making it so each game has a unique code and if that code is duplicated being found on your system they'll ban your account.
Personally i'm hoping those rumors of the rented stuff being wrong, but in all honest I wouldn't put it past Microsoft. They are in the business of making money not making their consumers 100% happy.