That's a pretty big chunk taken out.  

Well is what we expected =p.

Publishers get also nothing for an used game anyway it is more interesting to know how much they get for games on ps now/Game pass

With the middleman removed, digital is better in almost every single way. Better for the console maker, the publishers, and the consumers.

More games will be willing to launch at $39.99/49.99 price point, and there will be deeper discounts and sales on games too,

Doing the math, an $49.99 game in digital earns $35 for the publisher, while a $59.99 game in retail earns them $33. A lower price point in digital still benefits the publisher more than a higher price point in retail.
For the console maker, a $49.99 game in digital rakes in $15 for them, while an $59.99 game in retail only rakes in $12.

Even if not many games launch at that price point, expect more frequent and deeper discounts, due to the publisher being more willing to take a hit in digital than physical.

If that flat fee thing is true, than it sways the direction towards digital even more.

edit: so lets recalculate everything with the flat fee included. 

Lets say capcom launches street fighter V: arcade edition for $40 in retail and digital. After removing the the fees, capcom gets $18 in retail (lets ignore that sony and capcom might have a deal on the game or something, and capcom is just making the game with their own money and resources). 

In digital, capcom gets $28. Night and day difference, right? Who will turn down the 55% more revenue?

I don't think so. There is no real evidence that a digital-only market would benefit the consumer at all. A monopolistic way of distribution would allow them to increase the prices, and they would only have deals when they decide to do so. With retail, we get both the store's own discounts and offers, second hand market and the ability to access to games already discontinued (without needing to rsort to that evil piracy). Games are more profitable digitally already, and yet we keep seeing the same exact prices than always.

Also, things like Best Buy's GCU benefits the consumer quite a bit. You get a 20% discount on any new physical game and 10% more trade-in credit. The price of GCU is really cheap as it only costs $30 for 2 years.

The reason  we see the same prices is because as of right now, Physical is still plays a huge roll. Look at retailers are pissed at xbox games pass, so much so that they decided to delist xbox consoles. 

Even though Gamestop is declining, it still has more than 4000 stores worldwide. If console makers allow lower prices for digital now, retailers will get extremely pissed and discourage people from buying said console, and even might stop stocking said console and games because everything is available cheaper in digital (like gameware did to xbox). After all, you cant buy the console itself digitally. And still need retailers to do that.

And needless to say, take out a huge chunk out of console and game sales. Give it two-three more years. Once brick-and-mortar shops fade to irrelevance, thing will DEFINETLY be cheaper in digital. Xbox Games Pass is just a small taste of what's to come.

That doesn't really address his argument about monopolistic distribution. It's not like the PC platform where there are a variety of storefronts to choose from. There's no regulatory force that would disincentivize Sony or Microsoft from increasing prices on a whim other than the hope of them being 'benevolent dictators'.

With physical games gone, there would be no real incentive to lower the prices. Why should they? Either you buy them from us, or you walk away. And even if dedicated videogame stores are becoming smaller and smaller, the big retailers around the world still sell them. In fact, because they are massive markets, they can afford to buy in bulk way more copies of games per store than the smaller videogame retailers, decreasing the price (not to mention online stores for such products).

Well, doesn't Steam have like huge sales that makes a lot of games dirt cheap? Thats what I hear anyways.

Like I said in m first post: "Even if not many games launch at that price point, expect more frequent and deeper discounts, due to the publisher being more willing to take a hit in digital than physical."

I dont really know much about Steam, so correct me if I'm wrong.

curious question: Do you think the console makers will raise their cut, once digital is majority?