Oh come on. This is some of the most generous spin of an already highly spun interview. The guy was asked a simple question, and instead of answering it, instead answered his own question, a talking point which probably appeared on his marketing materials, as if the reporter had asked "Don't you need HDMI to enjoy HD video?"
It's like asking why a car was designed without removable rear seats, to which the sales rep says, "well, actually, it's a myth that cars need removable rear seats in order to enjoy the full driving experience"
Then he goes on to imply that PS3 users *MUST* incur the cost of an HDMI cable because the PS3 has HDMI out, when in fact, PS3 owners have the option of forgoing HDMI and using component outputs if they want. He implies that somehow, builtin HDMI = less choice = forced buy of expensive HDMI cable, when in fact, it's merely an option for the user.
And then of course, the hilarious claims about MPEG-2 == MP3 == BluRay, when BR of course sports MPEG2, H.264 AVC and VC-1 just like HD-DVD.
MS obviously wants to avoid a direct answer as to why they avoided HDMI in the design of the original XB360 SKU, a console supposedly built for the HD Era, and I think the obvious reason is that in MS's zeal to beat Sony to market, they rushed it out rather than make them requirements and wait for specs to stabilize. I bet that had HD-DVD and HDMI1.3 already been finalized 1 year before the XB360 came out, the XB360 would have been designed with HD-DVD and HDMI as requirements. Sony had BR and HDMI as requirements, hence, their roadmaps had to be delayed minimally waiting for these to stabilize. MS wasn't willing to wait. Not including atleast a way to route signals to an external A/V multiport for a future HDMI/HDCP dongle was a big oversight on MS's part, and the Elite's existence is a testament to that fact.
Personally, I think MS went overboard on a la carte, to the detriment of users. A multiplicity of SKUs will ultimately confuse mainstream users, when mommie goes to buy Johny his XB360 birthday present, and an HD-less SKU is just stupid, and a pain for developers to deal with another optional platform component.
On the other hand, it's probably good that the XB360 didn't ship with HD-DVD since the death of HD-DVD would mean useless functionality, it would have also prolonged the format wars by putting 10 million HD-DVD players out there. Of that, we can thank MS for helping to sink HD-DVD.
