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This is the kind of discussion that I had in the 90's about the music industry =p. So few believed that buying music would be popular and now they are even selling Itunes cards everywhere because downloading music is that popular.

I believe that all games can be available digital and that we will see an decrease of available games at the retail stores that again will give a boost for downloading games. Nothing is so nice as trying to find a game for months and then find out that you can download it on XBLA/PSN and have it in an hour :).