The collapse of physical PC games needs to be studied. PC gaming went from having the best physical copies of games that you could buy, to being completely digital in such a short amount of time. I think Steam and Games for Windows Live were 2 of the biggest reasons for the collapse of physical PC games, but I'll never understand how we went completely from this:

to being basically 100% digital in such a short amount of time. I still have a lot of my PC games from back in the day, but they're purely for collection purposes unless I decide to invest a Windows XP PC eventually lol.

Started to go downhill with Windows Live games. Which are all now paperweights thanks to MS. It's why I won't support Ubisoft even if their games were not trash. Internet required to install SP games. WL was the same.

Backwards compatibility is one reason. Most of my paid for PS4 games were on disk. That's why I opted for the disc drive PS5 version even though I buy my PS5 games digitally.

Price is why it's important to me. I don't have to have to have specific game physically or digitally, but I rarely buy games at launch at full price. Sometimes mulitplayer games I know I'm never going to sell like Mario Kart I prefer to get digitally. One example a handful of years ago I bought Cyberpunk for $10 at Best Buy where the digital version of it never got cheaper than $20. Buying Cyberpunk physically for cheaper was a no brainer to me.

I suppose that Apart from Steam and so on there were a few other reasons. First, some online games and MMOs were initially on PC, and it was better for such games to be full-digital because they constantly got updates. Then there was a factor of indie games which often are Digital exclusive (I guess indie games started digitally released on both xbox live and PC launchers earlier than on PSN). Then early access type of gaming on PC happened (somewhere in 2009-2011) when first games in early access stage launched. I guess in 2009-2011 many developers looked at the digital success of indie, early access and online games and understood that it would be possible to move all other games full-digital. In 2012-2014 many studios went full-digital on PC, and PC launchers quickly have grown. And finally in 2015 "PC physical editions" of MGS5 didn't include discs (at least in some countries). In the middle of 2010s physical games on PC have gone away. 

And I found that out the hard way! I never bothered understanding what Games for Windows Live was back in the day until like 6-7 years ago when I bought a copy of Fable 3 for PC at a local games store. Owner assured me the license key hadn't been used yet. Started going through the installation process, then when it came to entering the license key, I got some error saying it couldn't communicate with the server. I looked it up online and saw that even if you have an unused key, the game still had to communicate with MS servers to authenticate.......and the servers had already been shutdown for several years at that point. 

Went through my collection and saw I had 10 GfWL titles immediately tossed them all out. They were completely useless. 

But, there weren't a huge number of games that released on the service. There were less than 100 games altogether because it failed so miserably. But, while a factor, I think that also pushed PC gamers towards storefronts like Steam and it was the late 2000s where digital PC storefronts really started to pick up......steam lol. Talk about a perfect storm that led to what the PC gaming landscape is today. 

Same with Ubisoft games! Even that exec talking about how players should get comfortable with not owning games. I didn't bother Ubisoft games anymore before that, but I doubled down on that afterwards. 

This thread demonstrates to me that some people are more susceptible to marketing than others.

They don't at this point. I used to be against all digital, now I'm for it. The Internet got better, no caps and the speed is good enough to see downloading as more of an install. Keeping my games on a hard drive is not much different than them being on disc, it's just sized down. Plus like mentioned in the OP they can't be lost and stolen and as someone who lost all my ps3 and 360 collection I feel safer having the games in the cloud. There is one issue, a big one, in that when I go to my library online sometimes zip can't find the game I'm looking for even though I know I own it. I know for a fact I own Civ 6 and it's not there but search it in the store and but it's missing there too then a few days ago it ends up in the sales tab of ps4 and this is the inly pkace it can be accessed.. This is the second game it's happened to, Greedfall went MIA too. I feel like my digital stuff is less secured when stuff like this happens. I'm hoping the transition to PS5 is as seemless as people say it is.

I wonder now, as someone against streaming and subscription services as the default, will I be for it down the road. Shrugs. 

As long as I'm happy. Pfft.

I wouldn't say can't be stolen lol. I hope you have two-factor authentication enabled. I know some friends who have had their digital libraries stolen because someone somewhere figured out their password to their account and were able to come right in, then change the password and email address. I think one account was able to be recovered but a couple others were not.