1. Why would you expect Xbox to NOT have a similar rapid growth of digital sales? The entire industry is moving towards digital, and there is absolutely no reason to believe that this momentum towards digital would have suddenly slowed or stopped only for Xbox in 2018-2020. Xbox has been at the forefront of pushing digital: Xbox Play Anywhere (buy a game once and own it across Xbox, PC and soon Xcloud - only for digital games), the first manufacturer to produce a digital-only console, Game Pass, the Microsoft Rewards program that gives credit for game purchases (only for digital purchases), Quick Resume (digital games only), promotion of digital game sales at retailers like Wal-Mart and Best Buy, and XCloud. And of course, the pandemic, which has accelerated the shift to digital for everyone.
2. Once someone makes the switch to digital, they are likely to stay digital. The shift to digital has been onesided; the average customer goes from physical -> digital, not digital -> physical. Also, funny you mentioned RE8 and Nier: Replicant because the Microsoft Rewards program I mentioned earlier actually did have special deals for those games (it only applied to digital purchases, of course)
From their Q3 2021 earnings: "Xbox content and services revenue grew 34% driven by strength from third-party titles, Xbox Game Pass subscriptions, and first-party titles"
From their Q2 2021 earnings: "We exceeded $2 billion in revenue from third-party titles this quarter for the first time."
Sales revenue seem pretty good to me.
As I said, RE8 physical is down 40% from RE7. This should mean that RE8 is having a catastrophic launch, yet no one makes that argument. Why? Because everyone knows physical sales alone don't speak about a game's performance. Yet, those same physical sales are enough to talk doom and gloom about Xbox game sales performance. Hmmm... interesting.
Because how much higher can you get than 79%? lol. You said it yourself, the entire industry is moving towards digital, hence PS5 has a Digital Edition that undercuts the standard model by $100 without sacrificing specs. You'd be hard pressed to convince anyone that MS has a commanding and universal digital ratio lead for titles that aren't on Game Pass. The burden of proof is on you. I'm giving you hard data, you're responding with wild assumptions. We aren't stuck in January 2019 (to put things into perspective, Playstation's FY2018 digital ratio only grew by 5%~ over FY2017, the rapid growth began with FY2019).
Nintendo and Playstation are growing as well, and unlike Microsoft, they don't shy away in reporting their gaming profits. "Losing market share" and "declining" aren't mutually inclusive. Even if we assume RE8 UK is representative of what's to come throughout the generation in every region and every game and every week (which it's NOT!!! Duh!), that wouldn't automatically disqualify Xbox + Game Pass from being a better selling and more successful and profitable platform than it was last generation. Sony's dominance in hardware and software doesn't tell the whole story.