I don't see why Blu-Ray or HD DVD are necessary for next gen games. If a game (take MGS4 for example) ends up being 17 or so gb, why can't the developers just split the game into 2 DVD 9s? I'd rather have to change discs half way into the game than have to spend an extra $200 on the console, and don't forget that the Blu-Ray drive in the PS3 reads data slower than the DVD drive in the Xbox 360.
As for movies and Blu-Ray/HD DVD, what's the point? If a 44 minute tv show (take Prison Break for example) can have 1 gb tv rips in 720p (in Xvid format,) why can't there be DVD players to read 720p/1080p in Xvid format? That way we could still use DVDs, but just have to buy a new player. And I'm sure a DVD player that could play Xvid videos would be much less expensive than a Blu-Ray/HD DVD player.
Just my two cents.