Xbox 720 Might Not Have Disc Drive

If your shelf space is limited, the next Xbox console might be just what you need. A new report suggests that Microsoft will not be including a disc drive in the system.

Sources tell MCV that the new Xbox will be compatible with solid-state card storage. These storage cards might or might not have a new format. Regardless, the console will be focused mostly on digital content

A digital-only console seems fitting for Microsoft. The current generation of consoles started with a war between two competing HD optical discs: Toshiba's HD DVD and Sony's Blu-ray. Once the Blu-ray won out in 2008, everyone assumed that Microsoft would offer an external Blu-ray drive for the 360. Instead, the company simply dove further into digital content. They expanded Xbox Live by adding downloadable Xbox 360 games and streaming services like Netflix, among other features. While DVDs are starting to feel a bit cramped - some games now ship on two discs on 360 - the fact is that Microsoft didn't need a Blu-ray drive to keep their console relevant. By going digital, they no longer had to worry about format wars.

As MCV points out, though, a download-centric console will make traditional retailers nervous. GameStop, for example, makes much of its money off the sale of boxed games. They also make a tidy profit from buying back used games and selling them for slightly cheaper than new copies. If the gaming industry goes full digital, retailers would need to drastically change their business model. GameStop's anticipation of such a sea change is probably why they decided to buy digital store Impulse last year.

The report suggests that Xbox will launch in 2013. The timing of the announcement isn't certain. Other rumors have suggested that Microsoft will reveal Xbox 720 (or whatever it's called) at this summer's E3.

"Xbox 360 has found new ways to extend its lifecycle like introducing the world to controller-free experiences with Kinect and re-inventing the console with a new dashboard and new entertainment content partnerships," Microsoft said in a statement issued to MCV. "We are always thinking about what is next for our platform and how to continue to defy the lifecycle convention. Beyond that we do not comment on rumors or speculation."