In Most States the Government Cannot tax digital goods. So by default a 60 dollar game is 5 about dollars cheaper. Now, you won't have to spend the gas to go get that game either. That is another few dollars in savings. The most you can get back from turning a physical copy to gamestop is a dollar or two. Digital is much cheaper! Go digital!

I don't buy new games then return them in a week. The games I turn in are 4-5 years old after i know im done with them.

My digital content isnt taxed. In most places it is not

Only suckers take their games back to gamestop!

If I'm buying a game digitally it must
1) be one I know that I'll play so often that I'll never sell it and I don't care what I pay for it
2) not be a game I might otherwise consider collectible in some way in it's physical form
3) At least 15% cheaper than current retail
and/or 4) Free

I just get the cheapest thing. I don't have much of a preference between physical or digital.

memory space vs physical space? what is cheaper?

a collection of physical games (good ones, even used) can be worth more in the future for your grand kids? :P

unless there is a museum for digital stuff in the future

I don't know what its like in other countries cause I only live in US, but I can pick up a lot of games for 20 dollars that are usually priced at 60 on the store :X for ex up till like 2 weeks ago knack and killzone were 60, but are like 25 on amazon.

1/2 of all states in the USA tax digital goods. Typically people can get games while out or shipped to them for free. Physical games(both new and used prices are legal in this argument) are almost always cheaper than digital on consoles. I would say if you trade games to gamestop you are likely someone who needs money immediately, doesnt care about how much they get back, or an idiot. You can usually get $5 and more for every game released for ever console ever(save for a few games like sports games)

Newer games aren't as competitively priced on digital (well, other than digital having no tax), but older games are much cheaper.

I can get older games on flash sales for 1/5th of what I would pay at retail, and not have to pay taxes on them to boot. 

In germany digital games are even more expensive than retail games sometimes.
For example: New Super Mario Bros. 2 (3DS) cost 40€ at release in stores, but 45€ in the eshop.
You got the double amount of stars for it though.

I dont think its not cheaper, I know its not cheaper. As far as playstation is concerned anyway.