I'm not sure about Microsoft, but I know that Blu-ray standard are not accepted by major company yet, their still fighting over which specification to implement. The technology belongs to Sony so yes you will see PS3 game that can hold large amount of data so it wouldn't require so much disc to play a single game.
HD-DVD was develop to over come the capacity of modern DVD using the same technology as Blu-ray. Both use blue laser as oppose to red laser, because blue laser is smaller and can write more precise thus allowing for more room. HD-DVD however can not exceed beyond Blu-ray capacity because it has to maintain backward compatibility with older DVD player. Blu-ray is a whole different specification so older DVD can not play them.
As for Microsoft and Nintendo, only time will tell. I predict Blu-ray will be the leading standard for DVD recording when major companies start to adopt it.