They encourage people to trade in their used iPads so they can sell them, yes.  But that is a side business.  Their bread and butter is the sale of console games.  They make little, if any, money on the purchase of the actual consoles themselves--they sell people consoles in the hopes that they'll come back and buy games for them.  If a certain console did not support retail games, retail would not support it.  I've spoken to a few managers of some nearby EB's, and they've told me this--it would hurt the console manufacturers far too much if they decided to cut the retailer out of the game-buying equation.

i heard the same bullshit argument about mp3 players and who doesn't carry those?  all it means is they would start marking up the consoles themselve to ensure a profit on it.  in the face of making money on selling a digital console and not making money on  anything at all -- i promise they'll sell it.  either than are they'll go out of business like blockbuster did when it refused to apdapt to the shifting market.

btw. the Walking Dead had the most activity of all XBLA games in April. Even higher than Trials. Probably the Dead Rising Case Zero effect, where a dirt cheap game ($5) sells multiple hundred thousand copies.

To be honest I really do not know anything about any games other than that are made by Nintendo. So I cannot honestly answer anything that you just posted to me.

Dead Rising Case Zero was the previous record holder for day one sales on XBLA. It came out shortly before Dead Rising 2 and was kind of a prequel to it (or maybe even a demo) for $5.
Now The Walking Dead Episode One is another cheap game that seemed to have done amazingly well. Anyway Minecraft is apparantly the biggest XBLA game as of now.

Wow! It really is hard to follow any of this. I will have to go look up some of this to make head or tails of any of it. Thanks for the information Barozi, you are a very informed member of the staff! And I like your posting style sir!

I'm not sure what parts you don't understand, but in case you don't know "The Walking Dead" is a TV series and Telltale (known for their point and klick adventures) made a series of short games based on the show that are only 5 bucks (and one of their highest rated games so far).
Dead Rising was almost a launch game for the 360 and sold almost 2 million copies, so it had already quite a userbase behind it. Then Dead Rising 2 became multiplat, but Capcom did an exclusive Dead Rising game for XBLA that moved 350k in its first week and about 700k lifetime.

The difference is that even with MP3 players, the music CD business is still well intact--head to HMV and yes, they sell MP3 players, but they alsohave an enormous collection of new CDs, which easily make up the bulk of their business.  In the case of a proprietary game console, if the manufacturer decides not to include an optical drive, and games are only available digitally, then the retailer is boned.  Unless they jack up the retail price of consoles to the point where they're well past what the average person is willing to pay, there's no way in hell retailers will be able to survive without being able to sell packaged software.  However, it is a symbiotic relationship--the manufacturer may want to sell all their games digitally only, but if stores refuse to sell them (which they will since they won't be able to make any money off them) then no one will buy the system in order to get those games.  So, it is in the best interest of both retailer and manufacturer to go with a model that allows for physical media.

I've been living in Scotland for 3 years and the internet service seems fine to me. I download most games from psn in a matter of minutes or seconds. I used to live in Greece and Cyprus and the internet speed was significantly worse. 50 mbps seems great to me and Virgin said that they're about to double that in a matter of months.

OT: I really wouldn't mind if all games went digital at some point, as long as they can offer a great service like Steam. The psn has had some great deals recently. I hope they keep it up.

You do realise that Digital Downloads could be sold by online retailers?