It seems that it partially depends on the region. For example, in my region the majority prefer digital media. First, the majority of people in my region are playing on PC (moreover, my region creates one of the biggest PC gaming traffics according to Steam statistics). But even if talk about console gaming people who play consoles they also tend to buy digital games. One of the biggest reasons is the thing that there aren't many physical copies of games in my region. There're a lot of discs of new AAA games and so on but it's hard to find smaller stuff for the last 7-8 years (something like F1 games, LEGO games, some popular indies which have physical Media). Moreover, people there don't often resell discs. There isn't a big market of used games. So, many gamers in my region have already gone full-digital in tearms of buying.
Nevertheless It's understandable why in some other regions people try to avoid going full-digital. Especially somewhere in North America. Many gamers in NA collect physical media for years and they have big libraries of PS4 and XO video games and therefore they can use them on current PS5 and XS. Besides some gamers are scared of losing digital media in case of some launchers like Riot Games app, Epic Store, Steam or MS Store in the long term might be shut down.
Also there's a rumor going out that PS5P will not have a disc drive and some people don't like this decision. But if we look at the video games roadmap then it's obvious that it would happen. 30 years ago there were 99% of games on physical media. Then Steam and Xbox Live appeared, then some MMOs went full-digital, then there were digital exclusive indie games, later there were early access games in Steam, then first cloud gaming services, then some smaller games from publishers lost physical media, and then something like AW2 or BG3 didn't have physical stuff on day one. It was predictable where it all went. Even physical single-player video games today need patches to download for a comfortable walkthrough (Days Gone is obvious example of such project).
So, going full-digital in a short perspective is a nightmare for some people but this thing is coming.