Heh, I was thinking about making a similar thread... 
I'd actually like optical discs to become obsolete completely; I hate the bloody things (unfortunately, I'm sure they'll stay around for a long time). If they were replaced by something like flash memory sticks or cards, then apart from anything else, we'd be able to save a lot of space (allowing consoles to be made smaller and laptops to have room for other stuff (incidentally, disc drives in laptops can often be taken out and replaced with a second hard drive)). Things would be quieter (this is an especially big issue with laptops, whose disc drives are often insanely loud), and I'd assume that not having moving parts would save power as well (although I might be wrong about this).
However, I don't see any kind of cartridge or flash memory replacing optical discs for game distribution. Flash memory seems to be following Moore's law as far as I can tell, the cost per GB will be much lower in 10 years time, but I don't think their cost per GB will ever be as low as that of optical discs. Companies that sell tens of millions of units of software/whatever on optical discs will be reluctant to change since even an extra $1.00 per unit will be a big cost. Even if flash memory or somethign similar does become cheap enough, it might not happen before digital downloads become feasible. Of course, even that might take a while; tens of GB are a lot to download for people in areas with bad connections or who have limited downloads per month, and it would take some pretty awesome servers to deal with millions of people simultaniously downloading big releases (like whatever the equivalent of MW2 will be for future generations).
We also have to bear in mind that games might continue to grow in size at the rate they've been growing over the past three generations.There are reasons why this might not be necessary, but it could still happen. PSX games could usually fit on a 650MB CD, PS2 games were usually a couple of gigs and PS3 games are sometimes over 30GB. The next generation will almost certainly have games that stretch the current 66GB limit for dual layered blu-rays and it's likely that some will go past that. The generation after that might have games that are hundreds of gigs in size (that sounds crazy now, but who would have thought 10 years ago that games would be 40GB like FF13?). We need to think not about whether the distribution method we're talking about dominating future generations is feasible for today's games, but about whether it will be feasible for games in the future, which will probably be much bigger.
Yeah. I think optical discs will still be used as the main distribution method in the generation after the next one. 
