Why doesn't Windows Live Movie Maker save to .AVI?

AVI is just a container format and could conceivably hold anything from low-res MPEG1 video to high-res MPEG4 encoded video.  Windows Movie Maker 2012 already supports two formats (.mp4 and .wmv) that can store compressed video up to HD (1920 x 1080) resolution without problem and that's about the highest you can get.

I think the misnomer here, and it may be from the days of SD video, is that AVI is a higher resolution format.  When we had SD camcorders that recorded in DV-AVI (720 x 480), that resolution was pretty good.  What made it good was that it didn't have a lot of compression, so it was closer to a "raw" format.  It also was an order of magnitude larger in file size compared to compressed formats like .wmv which was a disadvantage.

However, in the prior versions of Movie Maker (e.g. Movie Maker 2.1 from XP), the DV-AVI output choices for SD video could mean a perceptibly better picture compared to the alternative .wmv output.  However, this difference goes away when you talk about today's modern HD video.  The current HD encoding in WMV format (in a .wmv file) or the H.264 encoding (in a .mp4) format gives you both high quality video with a good balance for file sizes.  If you were to take HD video and encode it as DV-AVI you'd actually be losing resolution because it would have to be 720 x 480 rather than a possible 1920 x 1080.

I can understand your wanting the best resolution possible and I believe the .wmv and .mp4 options do deliver on that.  In fact, you'll see H.264 encoding used from broadcast networks, to cable companies, to online websites, to portable devices, to Blu-ray players.  You cannot say the same for the old DV-AVI standard which might have been fine for its time but is definitely outclassed today.

In any case, if what you want is an Xbox friendly format, do as PapaJohn noted and change the output of your movie from the default of .mp4 to "Windows Media Video" (aka .wmv).  Then you'll be able to work on devices that can't handle .mp4.  Alternatively, there are converters like Freemake Video Converter that can output to additional formats if .mp4 or .wmv don't meet your needs.

I wish it would write AVI as well.

It is true that AVI is only a "container" and that the underlying codec of the video inside it could be poorer than MPG4 or WMV.

However, if I shoot 640x480 video and get AVI files with the underlying codec of MJPEG,  that video is far smoother and sharper than any MPG4 or WMV encoding. 

If it were AVI with an underlying codec of MPG, or AVI with Cinepak, certainly not.  But it's hard to beat motion JPEG.

Would AVI/MJPEG files be much larger?  Sure.  But let me worry about that.  If I want AVI, why can't I do it?  Why did they even take this option out, since it existed in the older Movie Maker?

The new version of Movie Maker defaults to saving MPEG4 file types. You can't change the default but you can save to the Microsoft .wmv and .wma file types instead of MPEG4...... see this page of my website.

http://www.papajohn.org/WMM/WMM-save-publish.html

Saving your movie maker file to .avi is simple. go <file>publish  publish it as a zune file if possible if not play around with it :-D

Hi Snowburden,

We appreciate the time you have spent posting your thoughts about the features of Movie Maker. However, this is the current design of Movie Maker and there is no option to save the movie to an .AVI format. If you think that saving the video as .AVI format will be a convenient option to have, you may submit it to Microsoft who appreciates feedback and considers suggestion for a future releases. Here is the link on where you can fill up our feedback form.

https://feedback.live.com

Thank you.