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1. selling games, borrowing games to a friend
2. Digital games are much more expensive than retail games [even Steam (in Europe at least)]. PSN, XBL, eshop sales don't really count as retailers can have their special deals as well.
3. Games are huge and only getting bigger. There are several games over 30GB. The vast, vast majority doesn't have a connection that would allow them to download the games within a decent amount of time plus others have data caps.