Digital games work IN THEORY but because there's a technological gap between certain consumers, the climate isn't right. Not every game player is an upper-middle class suburbanite with 24/7 wi-fi highspeed internet that has enough disposable income to buy online shit and utilize the cutting edge technology available. People in rural communities, urban cities that have not fully utilized available technology, and many other consumer demographics just aren't able to fully take advantage of pure digital download media.
It really has its advantages but not everyone can utilize them. Furthermore not everyone wants to shell out the money for a computer, or external hard drive with a tetrabyte of space to store all of their movies and shit for easy viewing.
I mean hell, in theory it would be awesome having an entire library of movies stored in a space the size of a wallet, and be able to rent movies from home through downloading and shit but...it ain't feasible yet for everyone. And there is something more satisfying in tactile ownership that just isn't always replaceable with digital ownership.