First off PDF gave me the idea to make this thread from one of his so check his out too: http://gamrconnect.vgchartz.com/thread.php?id=165052

1.  Aside from Nintendo consoles, consoles from this past gen aren't known for being reliable, so say you bought all your games digitally then Microsoft/Sony shut down the servers for the 360/PS3 then your console breaks.  You basically just lost all your games and have no way of ever getting them back.

2.  If your harddrive if full, and lets face it they get full pretty quick, and you have to delete a game to make room for another one, then when they shut down the servers you can never play those games you deleted again because you didn't have the space. 

3.  If I buy a game and it turns out to be bad then I want the option to be able to resell it back.  Also a lot of people end up just selling their games after they beat them, personally I like hanging onto my games.

4.  I'm also a collector of video games, along with playing them obviously, and you can't add digital games to a collection.

5.  Collector's/Limited Editions.  Just to use an example, I pre-ordered Tales of Xillia and when I pre-ordered it I got a sound track, an art book and some DLC costumes for FREE.  Obviously if I bought the game digitally then I would have missed out on all of that.  Also I don't mind paying a little bit more if a Limited Edition is badass, like the MGS 4 one.

So those are my top reasons why I will always purchase my games physically.  I hear a lot of people saying this next gen is the last one before we go all digital, honestly when that happens I will just stick with retro gaming, there are thousands of amazing games from past gens that I haven't played.  So what do you guys think, do you prefer to buy your games digitally or have the physical copy.

While I do prefer physically too, this is absurd. At least in the case of the 360, you can make a backup copy of your games and upload it on your PC. And I doubt all indies can make up for more than 60 GBs of space. (Which some 360 haven't got, yeah, but most of them nowadays are equipped with 250GB).

And about this, preordering a digital game can still give you freebies.

You can't just copy your digital games off your 360, you have to transfer the liscence which requires the servers to be online.  Also if you buy ALL your games digitally then even 250GB can fill up quick.

Ya, but its nothing compared to what you usually get from the physical copies.

Touché.

But regarding to the non-bolded part, you can back-up your digital games off your 360. As long as you put the data back in the 360 with the licenses (Because the licenses are permanent on your hard drive, not because the servers are online) you can still play them.

In the case I said in the OP was if your 360 breaks.  If you get another 360 and put those games on there then it will only be the demo versions and with the servers down you have no way of getting the full games back.

I have to check if you can transfer licenses onto a device such as a pendrive. I don't know though.

Physical stuff > digital stuff. I'm always buying hard copies, whatever it may be. Games, albums, movies and stuff. I just love being able to touch the product. And I love cases.

Hard copy for anything that is available in disc format. Indie stuff (and other titles) that are exclusively available on PSN I get there. But if I have the option I go with disc. I like looking at my stacks. It's not the same when all are stored on one or two HDDs.