Microsoft's real intention was to create a format war long enough for downloadable content to become the standard. Blu-Ray movies have yet to see a big spike in adoption and with the economy quickly going into the dumps people are less likely to spend money on big ticket items such as a blu-ray player. Downloads are the way of the future since fiber optics are probably going to replace the current infrastructure in the near future. Then it will be just like people said about music..that downloading music will never succeed. We all see how that turned out. Downloading things means it is easier for small developers to release their things and cheaper to release as well since no physical media is involved. There could be massive server farms where people make an account, pay for a movie, the movie is flagged as bought, and you can stream whenever you like.
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