Nintendo's head honcho, Satoru Iwata, confirmed that the Wii U will not support either DVD or Blu-ray playback but would still come with an unknown physical optical drive.
Iwata dropped the bombshell during a Q&A session (opens in new tab) last week saying, "The reason for that is that we feel that enough people already have devices that are capable of playing DVDs and Blu-ray, such that it didn't warrant the cost involved to build that functionality into the Wii U console because of the patents related to those technologies."
The current Nintendo Wii doesn't support DVD or Blu-ray playback but does offer NetFlix streaming in the US as well as the BBC iPlayer now (and Amazon's Lovefilm soon) in the UK.
In comparison, both the Microsoft Xbox 360 and the Sony Playstation 3 offer DVD and/or Blu-ray playback by default in addition to video on demand; as one observer puts it, it means one less box under the TV and one less plug to take care of.
As a reminder, the cost of the license for a Blu-ray player back in 2009 was $9.50 and while we're unsure whether the price has fallen since then, we're convinced that Nintendo could potentially look to drive down the cost thanks to the prospect of selling tens of millions of consoles.