Most have already switched on PS and Xbox despite digital being more expensive than physical. This even holds true for the UK where new releases have been routinely 10 pounds or more cheaper than their digital version. There's absolutely no point in making digital cheaper when gamers have proven to be stupid enough to pay the higher prices.

Physical will just become more expensive. Sony is not going to drop digital prices. Those still buying physical releases either have no choice (bad internet) or are collectors that will stick with physical for as long as possible. Even if Digital dropped to $50 for new releases I would still buy the $70 physical version.

The market has spoken. People pre-order digital releases like hotcakes and don't mind paying extra to play a few days early...

Dunno about Steam, Sony doesn't port its games to PC day 1. So it doesn't matter if it's cheaper on Steam.

Probably not in my lifetime, but it will eventually become a niche restricted to collectors

People who now have 30-40 years and are adopters of physical media will be eventually phased out in 2 generations and will no longer be relevant consumers for gaming

You hit the nail on the head.  It's all about game preservation and that is why digital only sucks.  I feel that a person really appreciates physical media when they see a game they really like become no longer available to play.  The digital only movement is really a way to fool younger people who haven't experienced this pain yet.

Here are some disappointments I've encountered with digital only:

1)  MMO's that change.  You'll never be able to go back and play the version of the MMO that you really liked, and eventually the servers close and the game is gone for good.  Now realize that this actually applies to any game that relies on a server (like online shooters).  Once that server dependent game is gone.  It's gone.

2)  Digital only games on older consoles.  There are Wii Ware games where I physically have to hold on to the Wii in order to keep playing it.  I can't even buy these games again on the Switch if I wanted to.  Why?  Also, I bought Suikoden II on the PS3, but it's not even available for purchase on the PS4.  Again, why?  Shouldn't this be available on every Playstation going forward?  The physical version exists but it's expensive as hell.  None of these console makers have figured out a reliable account system yet for digital games.

3) Retro PC gaming.  It's a pain in the butt if it isn't on gog.com, and even then it isn't perfect.  I've heard people sing the praises of how PC gaming is perfectly backwards compatible, but in my experience that isn't so.  For example, I tried playing my physical version of Freedom Force a couple of years ago, and it didn't work on the current version of Windows.  I did some google searching to find out how to update, but every solution that was claimed to work actually didn't work.  Maybe I could have got it to work if I put several more hours of work into it, but I found it easier to just buy the game again from gog.com.  Even then they don't have the original intro to the game anymore.  That is probably something I will never experience again.  And a lot of old games are not on gog.com.  

Do you know what kind of gaming doesn't have any of these problems?  Console gaming on a pre-internet console.  If I want to play a PS2 game, I just turn on the system and put the disc in and start playing.  It's so easy.  That is the beauty of these old consoles.  But the newer consoles aren't even that great.  Games now require patches and a lot of games are just a disc/cart that let you download the game.  That sucks.  I would totally buy something like a Metal Gear collection if there was no downloading.  But downloading really means there is no game preservation going on.  However, if the game is 100% on your cart or disc then that game is there as long as the physical medium exists.  Your hardware can die and you can replace it and still play the games.

This is the sort of thing we are losing with the push toward digital gaming.

Retroarch

Digital is the best thing to ever happen to game preservation.  My computer is a nes, snes, n64, GC, genesis, saturn, dreamcast, ps1 and arcade cabinet.

Eventually, and I hate it. It could very well cause me to stop modern gaming altogether and just stick to the physical games I have.

It's really not.  There are always tradeoffs and compromises with software emulation.  Always.  

I'm still going to stick with physical, as it's typically the significantly less costly way to get the games than digitally. This is ironically evident as earlier today, a UK retailer opened pre-orders for the physical copies Super Mario Bros. Wonder, which isn't out for like another month and is doing a promotion on the game to take 25% off the retail price already. So the game costs £37.49 instead of £49.99.

Yes, it may get cheaper later down the line, but won't be by a meaningful amount and it could take ages for it to happen, especially digital versions. The other advantage of physical versions is I can get back a decent portion of what I paid if I'm ready to move on from it or it's not as good as I hoped it would be.

True.  Having access to over a dozen consoles, thousands of games, saves points, upscaling, stable framerate, button remapping and wireless controller support just is inferior.....

Lol true, and best part is its free and easy. BTW you can also download figncade which has everything instant from dreamcast to arcade games and playable online.