I think you guys are actually arguing this:

Quote Originally Posted by Myself!
But the common flaw with all of your (except BoB!) arguments is that you seem to believe if one thing is selling well, none of its competitors can sell at all.
Because the only thing that will make digital distribution the exclusive means to purchase games is demand. It just doesn't matter how easy or profitable it is for developers. And I think the numbers show that the 100 million+ demographic of enthusiastic gamers vastly and inarguably prefer physical copies to digital distribution channels. It's not because that's the only option - there are a lot of digital channels to choose from nowadays, hell, even Microsoft and Sony now have considerable retail titles for download on the store.

Quote Originally Posted by Yearg
Hell, I bought a 2 TB hard drive a few months back for less than $100. It's hard to buy even a cheap computer these days with less than a 1 TB HDD. Citing the 60 gigs of space on the earliest iterations of the PS3 is one of the most spurious arguments I've seen in this thread.
Do you mean an external hard drive? In any case, I think you missed my point: those 60 gigs went to not even a flash of a fragment of my PS3 collection. Keep in mind that I buy a lot of PS3 exclusives, and there's a growing circle of games that have filled up a double-layered Blu Ray (50GBs), and many more that have either filled up a single layer or enter double-layer territory. This is all compounded by the fact that games are getting bigger and bigger every year, and they'll be even larger next generation. If I had to choose between downloading the 50 Gigabytes of Metal Gear Solid 4 or buying the disc, I would buy the disc every time. And that gets back to your demand dilemma above.

Being that console gaming is many times more popular than PC gaming, I think it shows that in this medium, the playing field is not amenable as movies or music. When I'm having people over, we may want to play a couple races of Motorstorm, do some couch co-op of Killzone 3, go online with Call of Duty, or experiment a little bit in Little Big Planet. We simply can't do that if I have to decide which game to delete and then wait a few hours to download several, if not 20-30 GB. This is where Streaming comes back into the picture, but I think that's another topic.

Back to the original topic: I love Steam, and my PSP buying/gaming habits are very similar. So that's two of my favorite platforms where my content is exclusively digital. But digital just can't satisfy all of my gaming needs, and there's tens of millions of people who agree with me. We're not going to stop playing Assassin's Creed, Call of Duty, and Metal Gear simply because "Match the Cakes" is now $0.99 on the iOS App Store!