I think physical media is only partly about their kids demographic. There are rumors floatin around that Nintendo initially wanted to go all digital on the NX, but was deterred from that idea, fearing backlash from gamers. That backlash would not have come from their kids demographic, but from older gamers and collectors, that put high value on physcal media.

I think the Xone debacle was enough to deter anyone from attemping an all digital console for a while.

As far as cartriges go, they are actually way more cutting edge than optical media these days, and using them in a portable device makes sense.

Add an interface that includes highly parallel data retrieval, such as NVMe, and this thing is going to open new opportunities for fast, on-demand data fetching. Vast and unboken open worlds, anyone?

What bothers me about this rumor (which I still believe btw) is the 32GB it's rumored to come with. That is absolutely abysmal for a portable system that's supposed to come out in 2017. People don't want to carry a separate bag for all of their games, and this isn't going to hold anything. How does My Nintendo make literally any sense at all on a system that is not appropriate at all for digital media? Even after expanding the memory through SD cards. This thing sounds like an absolute nightmare.

I just hope the cartridges are big enough for Monolith Soft's next game, without them having to limit themselves by the cartridge's storage capacity :P

I'm actually very curious about this in terms of backwards compatibility, which is something Nintendo has been really great about. I wonder if they would do something to support the older discs, or just go full steam ahead with the cartridges.

Backwards compatibility isn't too big a deal for me, but I know some people who love it. And out of the three consoles, they've really been the best with it I think.