They should cut the bullshit and make the X1 with no blu ray disc drive, 1TB of hard drive, digital only and lower the price of the games to 40$-50$. Maybe even let online play be free and current Gold Members will be Gold Plus members with extra stuff and free games each month like PSN+ but I think this is asking too much.

I'm sure a lot of people would be less pissed if they go full digital this way but with more benefits to users, you have to give something to get something, full digital is sort of what they want to do anyway since you need an internet conection to use it.  Yes this is basically Steam for consoles but there's nothing wrong with being the Steam for consoles.

They can release a separate SKU with Blu Ray drive or an add-on blu ray drive (they have done something similar before) for the users that want an all in one media center and want to watch movies.

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EDIT: Additional posible solutions to some problems

Slow internet to download full games

Pre-download and play while downloading the game working together could be a solution. Publishers can let you start downloading the game 1 or 2 weeks before release date and it can only be played on that date, the game would be downloaded by parts, if you download the first part you can start playing while the next parts are downloading (exactly like the PS4 will do). I believe the X1 can do downloads while in sleep mode so you don't have to waste electricity.

Retailers would hate it.

Retailers could still make money selling the console and accesories and selling game codes for the people that have the money but doesn't have a credit card or doesn't want to put his credit card data online.

Retailers would be mad

I would personally prefer if they simply went full digital but the market isn't quite ready for that which is why they are having a hybrid system. This in turn will get the market ready for full digital next generation.

That's a good idea they should make it digital only , the disks are useless anyway as their main purpose is to install only

There's a huge difference between requiring a once a day connection to check the console in and requiring you to download every 25GB game to the HDD.

Retailers could still make money selling the console and accesories and selling game codes for the people that have the money but doesn't have a credit card or doesn't want to put his credit card data online.

Good point. But maybe if they do that thing like the PS4 where you can play the game while you are downloading it could a be a solution.

It is. Only purpose disk serves is a faster method on transfer.

Might as well with all the restrictions

They already do I believe (or at least with installing games). But my main concern with that would be that most ISP providers have a 250GB cap per month. When you start downloading 25-40GB games that disappears quick.