During their press conference at the Tokyo Game Show, Microsoft revealed that the Xbox 360 will support 1080p content through a software upgrade.
After announcing that the HD DVD Player add-on will launch in Japan on November 17th for ¥19,800 ($168.90 US), Microsoft revealed that the console would also support displaying both movies and games by upscaling to 1080p. Speaking to Shane Kim in Tokyo, Joystiq got some clarification on the new support and what it means for 360 games in the future.
Kim clarified that, while the software patch would upscale all content to resolutions as high as 1080p, Microsoft themselves had no plans to produce gaming content taking advantage of this ability. He was similarly convinced that very few other developers would see the value in producing 1080p games, with the singular exception of Sony's first-party studios, eager to validate the value of the capability.
While the 360 will upscale existing games to 1080p for displays that support it, there will not likely be a notable difference over 1080i.