Microsoft has suggested that it never "fundamentally backed" the HD-DVD format because it was focused on digital distribution instead.
Its comments add considerable weight to the argument that HD-DVD was supported purely to promote consumer indecision and stop Blu-ray gaining an early advantage.
"The horse that we're fundamentally backing is the one that says the future of entertainment content is online digital distribution," Neil Thompson, responsible parent for Xbox 360 in the UK, told The Guardian. "I would argue that we backed the right horse."
"If we're sitting here in 12 or 18 months time, we'll be saying, 'Why were people even thinking about a disc format when it's really about digital distribution?' Our strategy's been developed for the last six or seven years, and ever since we launched the platform [online content] has been our big, big, big bet."
Neil Thompson believes Xbox Live is streets ahead in what it offers online, and reckons Sony is "desperately" trying to establish its offering before it is too late.
"I think [DVD to Blu-ray is] much less significant than the transition from VHS to DVD. The fact that Sony are desperately trying to deliver an online offering means they probably understand that there's another front they have to develop for," added Thompson.
"What we offer is the deepest, most involving service of anyone, and I think the fees we charge are appropriate. Would I want to pay for the service my competitors offer? No, because they're not offering anything near what we do."
Xbox Live has offered downloadable films and TV shows to Americans since November 2006, although it took until December 2007 to launch the Live Video Store in Europe. And with no telly shows.
Elsewhere, Thompson refused to discuss the ongoing hardware failure rate of the console, claiming only that Microsoft had narrowed down the problems that were making them flash the 'Red Rings of Death'.
"There is a certain percentage - not a massive percentage - of consoles that were experiencing disk failures or CPU failures, or whatever word we want to use," added Thompson.
I had two of the disk type.