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Yep. The big loser here is the retail channel. Sadly, even though overall costs to get the product to the consumer go down, the price of a digital game does not.

I'm keen to see more digital focus personally. Have no interest in obtaining physical crap any more. Its far easier to just go digital. Especially considering my belief that game consoles are going to be supported more like the mobile sphere in that there will be no loss of gaming content support between new and old hardware. Sure new hardware will scale up in power an functionality, but the core system will continue to support the older software for years to come.