With so many threads about BC recently I think I'm gonna create my own, with a different view.

Started with the Atari 7800, BC is used to be a mandatory on a new console. When the library is really small, BC is a way to dramatically increase the number of title available on the console. Overtime, with changes to different architecture Physical BC was dropped and changed with software emulation. While this is probably doesn't matter if you're going digital, this matters a lot for the physical collector. In order to play again on the new console you have to purchase the game again and if you have a large collection this might cost a bit much. Usually Nintendo is the only one who still keep Physical BC on their console/handheld, with the release of the Switch this mark the first time the Physical Backward Compatibility is dropped from all 3 major console. The 3ds line is the only videogame system that still keep Physical BC but it's going to be phased out soon. And it's seems unlikely that Physical BC will make a return thanks to the rise of digital.

So does physical BC is still matter right now? 

Wasnt physical BC just announced for the Xbox like two days ago?

Absolutely. At least for me as an Xbox owner it does. I don't want games cramming up my hard drive, except indies, and MS is doing a fine job to enable backward compatitbility with many of my X360 physical games. Obviously the system doesn't support everything (yet), but it's a great concept, even if I still keep my 360 connected.

At least for me, physical BC is a great thing, still.

Xbox still has physical BC...

But in not too long, games won't even be physical, so you are right. Physical BC is dying, because physical as a whole is dying.

PS5 will have physical backwards compatibility.

Don't the games have to be downloaded though? It doesn't play them from the disc, right?

AFAIK you can't just insert any disc and play. Not all games are supported. So it's not true physical BC for me.

What does that matter? The OP says the problem is that you have to repurchase the game digitally, but you don't. You can use your physical copy, scan it, and you get a free digital copy. What does it matter if it's played from the disc or from the hard drive (which all games on both the PS4 and XBO are anyway), as long as you can still use your physical copy to get access to it?

With the Switch it makes sense. Wii U disks are too big. Not to mention the internals have been changed to be far more scalable.

So, while Switch isn't backwards compatibile, it is likely that the successor will be more backwards compatible than any Nintendo home console before it. That is, no weird separate emulation mode, no weird GameCube controller you have to use, and perhaps a unification of services rather than dropping one older EShop for another.

Personally Xbox has a lot of BC sure it is only +30% of all the Xbox 360 games so far but it can keep growing and I feel that in the future BC will be their.

Playstation doesn't have it but I feel like their next consoles will play atleast play the PS4 games.

Nintendo's DX editions are doing great and I fear the most BC wise.