I agree completely with the OP, but I still buy some games digitally under certain conditions...

1. No physical copy exists

2. The game costs $20 or less (will pay more under very special circumstances, but I am yet to pay over this limit)

3. The game does not take up an absurd amount of space on my hdd

Aside from that, you are preaching to the choir with me. Physical will always win out over digital in my book ... just are no real incentives for digital is the main problem ... that and they have so many drawbacks as the op stated.

If we ever go pure digital I will just go retro, and have my PC around for Steam sales (will stick to my $20 rule though so summer sales and ect. will be when I will get digital titles ... paying $60 for a digital game just seems absurd to me).

What pisses me off is that digital versions are the same price as physical.

It should be significantly cheaper. It was probably a year or so ago I read this now so my numbers may be way off, but I think the breakdown of a $60 game is...$40ish to the publisher, $8ish to the retailer, $5ish to the console manufacturer, and the remaining $7ish was packaging/transportation/etc...

So if my numbers are even remotely right, shouldn't that cut out the $8ish the retailer gets and the $7ish that goes to packaging and transport costs? Therefore a digital copy should be something like $45-50 at most compared to $60 for the physical?

If a digital copy was $45 I think more people would be down to buy them and say fuck off to physical copies. Then even though you can't return or sell back a digital copy, at least it was significantly cheaper.

I agree with you %100. I'm oldschool when it comes to that.

I agree re buying disc over digital- Ill download digital on the Wii/Wii U e shops if that is the only way to do so but I have only purchased 1 game digitally that I could have bought the disc and I regret doing so because It is one of the few games I purchased I wish I could trade in/sell.

IMO there is not enough incentive to buy digital, particularly for the Wi U because digital games are then tied to the console

I think digital sales will continue to grow up to a point then platuea until or unless there is more vale offered to buy digital- If I could buy digital a lot cheaper than disc I would consider doing so but so far most console games can be purchased a lot cheaper on disc

The convenience of digital is what has persuaded me to the other side in this matter, I used to always think I would never prefer to purchase a title digitally over a physical copy, but the convenience is hard to ignore. It has also helped me curb my insatiable desire to trade in every game I've beaten or become disinterested in again because I have a horrible habit of doing so, and a couple of weeks later re-purchasing the same title when I get the itch to hop back in. At least with a digital library, everything is one click away and I am not tempted to get rid of any of my gaming library. Say what you will, but it works for me.

If my 360 were to break and I lose all my digital purchases I can easily just replace the console and pirate all those games I once owned... then pirate everything else I want. I used to love collecting video games, but I just see it as useless clutter lately. The convenience of digital purchases outweighs the feeling of owning a box and disc.

New game smell.

That is all.

getting rid of the storage issue (see my thread on digitizing my dvds btw) and not having to disk swap is reason enough for me to go all digital.  games can be cheaper too (especially the out of print games). 

also, i think you missed one of the biggest markes against digital game purchases...  the time and bandwidth required to download a game.  if you have slow internet or tight bandwidth caps digital is practicially impossible.    ...but as my internet is fast most games download faster than me going to the store which is yet another reason i like digital.  i do have a bandwidth cap but i haven't hit it ever (250 Gb a month).

anyhoo, to each their own but i feel like you'll change your mind by next gen as the benefits of digital increase as services get even more sophisitcated.  i'm very excited for gaikai integration into psn.  if i could somehow play my games from my mother-in-law's house without hauling my ps3/4 i would be a very happy customer.  i think in 5 years i will be able to do that.

Same boat.

I used to collect DVDs.  At first I bought racks to hold the DVDs.  Then my collection of DVDs became greater than my rack space, so I bought Disc albums.  Then the number of disc albums I bought exceeded the space I had to hold them, so I bought bigger ones and also book shelves to house them.  At the same time, I purchased a specific style of Rubbermade storage box to house the empty disc cases in.  Because I didn't have space for them in my apt, I rented a storage room.  Same with my CDs, same with my video games. 

When I started ripping my music to my hard drive, I fell in love.  When I got my 360 and could access it from my computer, loved it even more.  That's when I wanted everything I owned to be digital.  The movies never really made it, since space and time are limited.  I eventually ended up just selling them all off.

When I started having problems with my Xbox 360 DVD drive, I realized the benefit of digital.  My digital copies of games I could play, no problem.  My disc-based games, no possible way. 

I have no problem with disc-based games.  In fact, I think if Microsoft is smart, they should give the option to gamers to take a disc-based game digital.