According to the latest rumor, Microsoft plans to equip its Xbox 720 gadget with a Blu-ray drive, but will limit the device so that it can be used only for games and not media playback.

The Xbox 720 is submerged in all kinds of rumors, especially since Microsoft has been particularly silent about the next-generation Xbox. Nothing is actually confirmed until Microsoft decides to make it official, but numerous rumors try to fill in the gaps in the meantime.

Gamers have been raving for years about how Blu-ray support could take Microsoft's Xbox console to the next level. In time, such arguments and speculation have turned into rumors. As the Xbox 720 is getting closer to its official unveiling, some of those rumors are spreading like wildfire, and the purported Blu-ray support makes no exception.

The PlayStation 3 enjoyed great success and drove numerous sales particularly for its ability to play Blu-ray discs. Limiting the Xbox 720 to play Blu-ray games, but not support media playback would be an interesting choice to say the least.

On the other hand, it would make sense in a way for Microsoft to limit media playback. The company already draws profits from streaming media content to the Xbox through its Xbox Live service. In addition, using a Blu-ray drive for games makes sense considering that games continue to grow increasingly bigger.

Microsoft draws a reliable and steady stream of annual revenue from Xbox Live via subscriptions and digital purchases. The latest Blu-ray rumor comes from TheNextBox and according to its sources, the Xbox Live business justifies Microsoft's decision not to support Blu-ray movie playback. Users can purchase and stream premium digital content via Xbox Live, and use Blu-ray discs for large games. On the other hand, this limitation might make consumers question the console's all-around entertainment capabilities.

In terms of storage space, Blu-ray discs offer an unquestionable advantage. While the Xbox 360 currently faces storage problems, an Xbox 720 with Blu-ray support for games would undoubtedly make gameplay far more convenient.

The rumor remains unconfirmed at this stage, but if it proves to be true Microsoft could see many customers shift to Sony's new PlayStation to enjoy media playback as well. Microsoft is expected to unveil its next-generation Xbox console during E3 in June. So until then, rumors will continue to make rounds and point in all directions. Take everything with a pinch of salt.