There are quite a few pitfalls to digital distribution. Lots of opportunities to screw things up and give the customer a raw deal.
But like Stickball says, the incentives are in place to try to give the customer a fair deal. I'm slightly concerned that I might have to pay again next generation for games I've downloaded this generation. But this would raise a huge barrier for me as a consumer to upgrading to the Wii 2 if I can take my disc-based games with me, but not my downloaded games. If Nintendo is smart (and they usually are) they'll find a way for me to transfer my VC and WiiWare games over to the next generation of hardware.
The company who figures out the best model for digital distribution will have a substantial competitive advantage over those with inferior models. The cutthroat competition in the console market is fantastic.
"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event." — Mona Hamilton, Capcom Senior VP of Marketing
*Image indefinitely borrowed from BrainBoxLtd without his consent.
