I don't think they should rely solely on downloads. They would have to rely on people buying the cards at the store or using credit cards, which could isolate some of their audience and the amount of games people bought.
Also, they would be at a major disadvantage if they occupied that much less shelf-space. Imagine that it is Christmas time and you are looking for gifts for your kids, you wouldn't be able to pick up anything for the Microsoft system but Sony and Nintendo sections are full of games.







