Blu-ray will be one of the biggest factors in the next gen war. If it starts to win, many people will see the PS3 as a cheap blu-ray player, which they will not be hesitant to buy as the war is being won.
I think that the reason that blu-ray will be the most important factor, is that the size a game will increase more and more, because of all the extra animations and better quality audio, and 1080p videos will take up alot of space.
Games like GTA IV would not be as good if each region was on one DVD. If someone had a 360 and a PS3, surely you would buy the one on a single disc? As far as I know, SA was close to the limit of what can be held on a DVD, and so could it really be expanded, and have much better graphics, on a single DVD. If it is to be held on one disc, the BD is the only answer.
A game like Final Fantasy XIII, where there will probably be more than 5 hours of 1080P video, you will need a blu-ray disc to hold that amount of video, as well as the game. Although FFXIII is not coming out on DVD, games like it will have similar problems to what it would have if it was on DVD.
add me
Essay Pro