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If they screw retail, retail screws them back. It's just a matter of throwing your consoles to the last place consumers will look. And them, a competitor will offer retail stores a better deal and will won the gen hands down.

That said, I like retail. Just digital and no physical would lead to a future like Steam, where they shove always online DRM down our throats without any choice. I don't want games that can have the plug pulled anytime the publishers feels like.