A factor many are forgetting is that it may be nice to get digital distribution for profit margins and usability. But one huge flaw in Go's arrangment was actually getting the hardware into the gamers hands.
I remember at launch several retailers refused to carry it, honestly can you blame them I mean if gamers are going to buy all the software from Sony and not a spend a dime more in their store why would they sell it? Sony had to sweeten the deal and managed to convince many mainstream retailers to carry Go.
However even after Sony convinced many retailers to Carry Go, they were over priced (According to users in this thread due to retailers). Retailers also often had one unit on shelves and dedicated as little space to it as possible. I remember I was going to buy one and realized that it was behind the counter and out of sight. Only HMV had PSP:Go out on the shelf (At the time) later when it was put on the shelf retailers dedicated like 80% of the PSP's hardware shelf space to the PSP 3000. Retailers did not want consumers buying PSP:Go.
I remember retailers initially saying "Why would we advertise and sell a competitors product" its an easy question. When your store makes a living selling games why would you sell a product that encourages consumers to avoid your store and its products? With game hardware this way more difficult then say film or music. You can get digital distribution models for television and movies from your cable provider which you hire anyways. Retailers that don't rely on movie sales for a living also sell digital devices forcing some retailers that actually do survive on film sales to put a nail in their own coffin by doing likewise. Similar with music, but you'll notice that retailers continue to fight DD in music to the bitter end. Problem is every phone pretty much is capable of playing MP3's anyone with access to the internet can download them on almost every electronic device.
But for games, DD is reliant on game specific hardware. You may have a great DD model for games online but if you can't get the hardware into the hands of the consumer, then it isn't a smart idea. I agree with Sony there are way to many factors that make digital distribution impractical. Yes DD can be done but not with the success required for Sony or any of the other major players to maintain their success.
-JC7
"In God We Trust - In Games We Play " - Joel Reimer







