Blizzard would require assurance from Microsoft that Xbox Live could handle its software's "heavy demand" before considering the creation of a modern day console MMO.
CVG spoke to Blizzard's Greg Street and David Kosak ahead of last night's World of Warcraft: Cataclysm launch.
The pair agreed that the closed nature of Live - which limits third-party title updates - meant "discussions" would have to take place with MS before development began.
Asked why we're yet to see a real, big console MMO, Street replied:
"I think the control scheme is a part of it, the traditional MMO has always had a lot of typing and is dependent on the mouse and keyboard paradigm.
"A few years ago everyone said the FPS couldn't be done on consoles and clearly Microsoft has been able to pull that off with Halo and other games. Hopefully someone will be able to do the same for an MMO on a console."
Kosak added: "It's a real design challenge because you have to throw out a lot of what you've learned on a PC.
"On PC you're sitting right in front of a screen, you can have a lot of dense information displayed and very complex control schemes. If you're playing on a couch from a distance with a controller, it requires very different design.
"I'm sure someone will solve that problem. I'm amazed it hasn't been solved yet but someone has to put a lot of thought into it and it has to be the right game for that medium.
"I think we'll see something in the next few years. (Laughs) I said that a few years ago but I'm pretty sure someone will solve that problem! It's tricky but someone has got to be able to find an answer to that."
Asked if the closed nature of Xbox Live would need to be discussed too, Street said: "Yes, I think certainly that we would place really heavy demand on the technical structure of those things before it was something Blizzard would want to get into."
Read part one of our World of Warcraft: Cataclysm interview.