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Not sure if you're being sarcastic but "digital only" means the only way to put games on the device is via digital downloads (aka from the web store downloaded via internet).
Each company tries this because it effectively eliminates the third party/aftermarket sales and gets them a monopoly on prices. Never have to lower the price on a game to move physical copies of you don't have physical copies to store, so games no matter how old can stay at full price for as long as they like. Don't have to cut your margins by selling at a reduced price to a third party to resell so all the profit comes home.
I know why companies do it, it makes sense financially. But turns out a lot of people aren't fans of not being allowed to have the option to physically own their own media, even if they don't always do it.
I'm pretty sure the keyword here is download and not digital, what other kind of download do they imagine?
I was absolutely being sarcastic about calling downloads digital, since it's the only kind there is. Even an old acoustic coupler with 75/300 baud is still a digital download, despite being on an analogue line. Which in principle everything up until we got mobile and fiber were. Except ISDN
Which is why the same attempt originally failed very very badly on Xbox. So yes I absolutely agree on your last part.
Personally I wouldn't mind that it is download only, if I could save the copy, and buy the downloads as freely from competing shops as used to be the case with installation discs.
That's a redefinition of the word "digital".
Digital just means it comes as elements of information which can only have discrete values (for example 0 or 1, i.e. a bit) whilst analog can have any value in a continuous range of infinite precision (for example, the depth of the grooves in an LP disk or the voltage on a line like in telephone landlines).
Pretty much all computer tech nowadays is digital (though it used to be that it was mixed: for example CRT monitors actually received an analog signal), and that includes the disks (all generations since CDs store data as bits and bytes, not as continuous lines of arbitrary intensity).
Mind you, maybe the word "digital" has been redefined by the marketing types recently for use in communications with non-experts (frankly, I don't know for sure), but for us old hands in Tech (certainly for me who am an Electronics Engineer, an area were "digital" is a technical term with precise meaning) that word being use like this to mean "download-only" just jumps out as incorrect.