BobbyLight  wrote:Wasn't even really factoring in bandwidth and that's obviously huge...  I do think it's a while before digital distribution is a 100% kind of thing, but I think we will start to see pushes here and there during the remainder of this generation to get the wheels rolling.
I also hope the next generation of consoles isn't even close.  I can't imagine something so much better than my PS3 that it could get me to pay 400 - 600 for a new console.  I think this generation has some years left, at least that's what I am hoping for.
The PS3 has a longer lifespan left, first of all Sony put in a next generation optical drive from the start(blu-ray vs dvd) and they really did beef up the hardware in comparison to the 360 and especially in comparison to the Wii.  The 360 came out a year before the Wii and PS3 but it has held up very well over time, the Wii is definitely due for a successor soon, I think that consoles are shifting towards a longer than 5 year lifespan because even if the 360 has a successor come out in 2011 it will be 6 years old at that time.  The 5 year life span has been in place for a while but I think it is fading.  Nintendo came out in 1985, SNES in 1991, N64 in 1996, Gamecube in 2001, Wii in 2006.  So outside of the 6 year gap between the NES and SNES it has been a consistent 5 years between consoles.  I only used Nintendo as a measure because they are the only console manufacturer that has been around for the last 25 years at this point, Sony obviously came in with the PSX to compete with the N64/Dreamcast and the Xbox didn't come around until the PS2/Gamecube generation. 
I know that Sony has said they plan on the PS3 having a 10 year lifespan, I don't know what Microsoft thinks of the lifespan of the 360 is but I could see it lasting a couple more years to go into the 7-10 year range, but obviously the Wii is a little dated.
Hard drive space is also the other issue that I didn't mention beyond bandwidth, I really didn't mention it because it isn't as much of an issue anymore, I know I have an external 1.5TB hard drive that I purchased for $120 but that will be a cost factor, I can't see a completely digital system launching with anything less than a 1 TB version available.  Luckily even current generation consoles all have USB ports so it shouldn't be a problem to add an additional external hard drive to these things even if they do go cheap on the hard drives with say a 300-500GB hard drive.
The other factor is that a lot of people are running these systems via wireless connections and have older wireless routers that don't support the new higher speed standards.  I'm a bit ahead of the curve being a tech guy and can pull the full 8Mbps off of my wireless that my cable connection supports but a lot of people would be lucky to pull 1Mbps with their older routers.  
I fully expect full digital gaming to be the way of the future, I even expect next generation consoles to expand on what the current generation has done, maybe even offer a lot of full retail games in their online stores, I just don't expect it to be the complete standard and majority way of distribution yet.  I think we are 2 generations of consoles away from it being a standard and probably 3 generations from physical medium being eliminated.