Have any of you heard of THE RAZOR BLADE BUSINESS MODEL?  Do you understand how it works?

That is a major reason None of you should ever want a digital distribution only full video game system.

Great they figured that out after they release PSP Go kind of a Fail.

I hadn't, or at least hadn't heard the term, so I looked it up.  Do you understand how it works?

http://en.wikipedia.org/wiki/Freebie_marketing

Essentially you're talking about the deal where consoles were sold at cost of lower and games were sold for large profit.  I'm not sure what you think that has to do with DD and why that's such a horrible thing for us. 

Games initial cost won't likely become higher, instead publishers will look towards more things like freemium, DLC, and online passes for extra revenue.

Thats MAYBE what you think, what if Sony really released the GO to prove the market was not ready for a full digital console, you know it wouldn't surprise me, the GO hasn't even hurt sony at all, and tbh I love my GO, so its not been 100% fail, so who knows if they ever developed a digital console that will please the majority for everyone it may work out, but only far far away in the future..

Many people have given you different reasons why it wouldn't work, but I'll give you a different one and that I think it's difficult to argue against.

As the article says, PS products sell globally. Many, if not most of the markets where PSVita and PS4 will sell are just not ready for a DD only console, they would lose millions of customers in developing countries alone. Giving both DD and physical copies is just the best option right now.

That is a great argument and that's why I change my thoughts to a mix (though I prefer DD).  My original thoughts on the first post was it meant both so my bad there.

Personally, while I do agree that downloading a console game can be a lot for most people, portables aren't that bad.  The Vita can do pretty cool things but it's still a small screen so the games aren't going to be that big.  I believe I read that Uncharted is going to be in the 4GB range but I have a funny feeling that won't be the norm.  Cinematic high detail games like that are hard to do on portables because that's generally not want people want a lot of, they want things closer to Angry Birds for their portable fixes-- short, simple, sweet.  I wouldn't be surprised if the norm was somewhere around 1-2 gigs which is the size of an HD show which seems acceptable.

I don't think retailers would suffer that much if it all the games had a digital version, because there are still plenty of people out there who like a physical product in their hands. Also, companies like Atlus always provide some kind of retailer bonus, so people will go after that, too; there are also collector's editions.

Also, why shouldn't the digital copies be cheaper? They're saving money on distribution, like the discs/carts, boxes, manuals and the like, so they don't have to worry about those costs. Granted, there might be some costs associated with fees for downloading rights (I know PSN does this, but not sure about LIVE or Steam).

yes...and I don't see what this has to do with DD.

You do know that Sony and Microsoft have already been using that model this gen (and probably gens past).  Sell the console at a loss (Give away the razor), make it back on all the games sold (profit on the blades).

OT: I don't know about going fully DD, but having all games available for download and in retail seems the best.  Which, as Twesterm seems to be saying, would pretty much be exactly like steam.

Well since you are pretty new to the term and the concept, let me fill in the rest...

Do you understand why the PSP GO was launched at $250 when the regular PSP was cost $179.99 at the time?   Not only that, but the PSP GO's price stayed there and stayed expensive for nearly the whole time.  Why was this when the PSP Go was officially crappier hardware (smaller screen and can't read UMD's).  Hell it should have been less...Major revisions almost always get significantly lowered prices right?

The reason is because it was dig dist only and the PSP GO was no longer going to be sold with zero or low margin.  This wasn't Sony's doing...this is retails doing.   They don't sell products just for fun...they sell for profit/margin.

Also be aware, that the Vita would be launching at something near $400, and the PS3 would have launched at $800 - $1000.  In fact the PS3 would still cost $400 today...and that's if we're lucky (Selling less hardware would have dire consequential effects on the whole ecosystem)

Without the software, us getting really nice hardware for less than it cost to make would come to an abrupt end.

No thanks.

The digital copies often aren't cheaper simply because of arranged with retailers.  For example I'm pretty sure Sony cannot offer a game digitally at a lower price until a certain period of time elapses vs on-sale at retail.  Look at the numbers on this site.  Huge numbers of games are sold at retail and the retailers do not want their own suppliers undercutting them.  Now of course often you can find a game cheaper online, but the issue for Sony is they are both supplying retail and competiting with it, whereas Amazon or Steam are simply direct competitors with retail vs say Sony.

Large companies like MS and Sony often have issues such as this when they are locked or at least constrained by agreements and focus for other channels.

I'm pretty sure Sony and MS and others would too - all digital would more or less kill second hand market and force everyone to buy first hand or nowhere - so it's not desire but difficulty of execution that holds them back.