Blu Ray will eventually fade away, yes, but I don't think it'll be as soon as 5 years.
Blu Ray movies are at a MUCH higher bitrate than any streamed 1080p content. One could then argue that streaming will only get better, but in order to stream Blu Ray quality, 1080p video to millions of viewers most of the world will need a better internet infrastructure put into place. I highly doubt the entire planet will be covered in fibre optics within five years. My guess is that Blu Ray will stay prevalent in less internet developed countries, where physical movie sales will get a bite taken out of them in more developed countries, but will stick around because of my second point.
Physical copies. Some of us need the sense that when we paid 10 or 15 bucks for our album or movie, we actually got something for it. We want something with physical presence in our hands to show us that yes, we did indeed buy that movie. With digital downloads stored on our hard drive, there is aways that chance the hard drive will pack it in, you somehow acquire a virus, a component in your computer fails, or anything that can happen with computers happens. Not only is your computer gone, but all of your music, all of your movies, everything is inaccessible. No popping in a movie into the player to stay entertained while it's down..when the computer is down, you're entertainment is down. The cloud in my opinion is one step below that. Not only do you not have any physical copies of your movies, you have no physical copies of your data now. Internet down? Screwed. Your particular clouds server down? Screwed. I mean yeah, it has it's benefits, but it is definitely not for me. I'll keep my data where I can see it, thank you very much.
As for gaming consoles I can only hope that they keep it physical. The point at which home consoles get rid of the optical drive is the point I stop buying consoles.
Now I kind of sport of mix of the digital copy world and the physical world. I refuse to buy any large game in digital form. I'm spending 40-60 bucks per game, I want a physical, always there backup should anything happen. Movies and music however I'm all digital for ease of streaming throughout the home.