Nintendo should not go the digital-only route because this will alienate retailers and undermine Nintendo's Amiibo strategy which is focused on getting gamers to come into stores.
I think that SD card-based releases are the best option for the NX. If the NX handheld/home console rumor ends up being true than the card slot should be on the handheld device and communicate wirelessly with the home console. A 64 GB SD card should not cost much more than $10.00 to manufacture and a 32GB SD card should be dirt cheap to produce. I don't see many games needing to go past 32GB (especially Nintendo 1st party games) but Nintendo can likely subsidize the cost of the 64 GB cards for third parties. The cost saved on an optical drive could be significant for the NX and I also think that this could easily make the NX the smallest and most compact of the consoles too.
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