Mary-Jo Foley is reporting that during a Dolby Laboratories earnings call on August 4th revealed that their audio technology will not be included with Windows 8. Dolby Digital audio is used to playback the audio on DVDs, and depending on the television source, live/recorded TV. If this does indeed happen, it will be the first time that Dolby Digital decoding wasn’t included with Microsoft’s OS since the release of Windows XP. This news didn’t just upset home theater PC fans, but it also rattled investors. After the announcement Dolby’s stock price dropped dramatically. It closed the day on August 3rd at $40.77/share, and is now at about $30/share.
Dolby states that they will focus on working with hardware partners and software vendors to include Dolby Digital within their products. This means that like the days of XP you’ll need additional software to playback DVDs on your Windows 8 computer. If your computer is connected to an audio/video receiver (AVR), and is setup to bit-stream the audio, then your AVR will naively playback the audio without the use of separate software on the PC. Microsoft may have decided that its no longer necessary to support DVD playback within the OS as the disc format is slowly being replaced by Blu-ray and online video distribution.
Source: All About Microsoft