So I got into a lengthy discussion with my brother last night; we had differing opinions. We both had a good deal of reasoning behind our thoughts and conflicting information. I'm betting on a full digital and retail, like the Vita is doing. He's betting on Microsoft and Sony agreeing to go all digitalI admist being pressured by groups like Activision and EA. I don't know about what the Wii U is doing or if they announced what they are doing already, I'm just going by Xbox and PlayStation. Whatever the Wii U is doing is important though, just too lazy to look it up, I'm sure someone here has the answer. Anyway, what do you guys think and what kind of implications will it have?

EDIT: Now that I have some coffee... The market has been slowly shifting towards digital distribution for the last several years.  A full change away from retail is probably not the easiest thing to do since there is a pretty strong market for retail, just compare retail to digital sales if you can find the data. Retail is still big, but the market is shifting. My brother thought EA and Activision would threaten to go exclusive to one console or the other (xbox or playstation) if they wouldn't agree to release all digital consoles. I'm not sure why he thinks they would have the authority to bully these companies, I usually just ignore it.

Anyway...here's a chart. Circle style.

No way. Not anytime soon and likely never.

That's how I feel, but next gen presents a new oportunity to dual release both retail and on the digital store front. Especially since Sony is able to do it with the Vita now.  It's kind of a best of both worlds scenario.  My brother would disagree that the elminiation of an optical drive would provide such an added value that it is the way to go, supporting those Xbox rumors, I on the other hand just see potential disruption in the consumer market.

There are simply too many markets in which high speed Internet connections are either unavailable or too costly for all an digital generation of consoles to be feasible.

There is still no incentive for consumers to go digital.
With cable/isp companies wanting impose caps in the usa/canada. It will make consumers think twice in dling stuff over the net.
Not to mention not everyone has high speed internet. Games can take 2-3 days to download, why not go out and buy it.
Also no price incentives, publishers are saving from "disc/packing/shipping/retailing" and nothing is transfer to the consumers. No thanks,

No way. People with poor connections would be left cold. So retail-digital seems likely, akin to the Vita.

Also, the WiiU has a disc slot, and will be using DVD's or something. So, it's impossible already :p

It's a terrible shame that the consoles and handhelds have such laughable digital prices when compared to just about any digital distributor on the PC.

PC is just as bad, most PC games apart from the Indie stuff I can get a physical copy £5-10 cheaper on Amazon than services like Steam ETC.

That's why the Vita store is so interesting. Not all, but most titles have a 10% discount available online. Will the online prices drop when retail prices do? That's hard to say. I would hope so. Atleast a digital library will have games available after they aren't available new in stores.

I think a digital only console is still far away. For next gen, I think we'll see more games distributed digitally. Going all digital would be commercial suicide.