From computerandvideogames.com:

Speaking exclusively to CVG, the trade body [BDA] dismissed Microsoft's claims that the de facto gaming storage format to follow DVD will be online downloads and/or streaming.

Despite the trash talking, however, the Blu-ray Association said it would have no qualms accepting Microsoft into its ranks - in a kind of 'discreet service available' way.
"Any company willing to join [and adopt Blu-ray] would be welcome," added Heaton.
Full Story: computerandvideogames.com