I agree,

Jimmy
www.maagamer.com

I think the main issue that will always hold back a complete transition to digital distribution is space. Certainly on the PlayStation 3, if you believe that supposedly Metal Gear Solid 4 used up all 50Gb of the available capacity on the disk. Certainly a game like this will never be a viable option for digital download. Of course as time presses on more and more developers will begin the use the full capacity of the media available to them, already we hear rumours of disk storage issues with the Project Gotham series. Ironically though, sticking to DVD media could have turned out to be quite an advantage for Microsoft in terms of digital distribution. Let's say they release Gears of War 2 via retail and Live. At a maximum of 8Gb for a downloaded copy and with new 360 buyers most likely having the 60Gb SKU it would seem to be a pretty irresistible option, especially for those hard core fans who'd rather not queue up in the cold for a midnight release party. Microsoft could even significantly reduce the cost of the games distributed in this fashion whist also increasing their profit margin on each unit. They'd be keeping the cut usually taken by brick and mortar middle man whist also negating the cost of packaging.

For Sony then digital distribution seems more likely to stay the home of smaller budget titles. As for Microsoft it seems as though they have missed a lucrative opportunity. Especially with most people already owning the 20Gb 360 it could be a long time before they could seriously implement a digital distribution platform for their high profile titles.