If console manufacturers go full digital they'll have the risk legislators deem their E-shops a monopoly and force them to allow other digital stores on their platforms. See Apple as example.

Having retail, even as key-cards or codes in a box means there is a choice were to purchase and therefore makes it unlikely legislators would intervene. I believe this to be the key reason 'physical' in what shape or form will remain.

That's a good point. Even though Tim Sweeny has said he will not sue consoles, Epic games might still find a way, and regulatory actions could come after them once they go full digital. It looks like Xbox is jumping into the all-digital world first, and they'll even let other stores sell games.

In the US monopoly actions are all judicial not legislative. That means that even if legislators thought x brand was a monopoly there isn't much they could do but ask the justice department or ftc to take action on the matter. They couldn't get force them to open theor platforms up to other e-shops. We're a long way from the 40s Paramount decree that stopped movie studio's from owning movie chains. If companies like Netflix and Disney are allowed to distribute their movies and shows without an issue then there is no real action to take.