Yes, but for how long? Not long.
http://www.hollywoodreporter.com/new...revenue-362799
http://www.guardian.co.uk/media/2012...sical-sales-us
http://arstechnica.com/business/2012...sical-in-2012/
It's all downhill for physical sales from here on out. Television and film are experiencing a similar transition.
There's a lot of "I'LL QUIT FOREVER" hyperbole involved with the hardest of cores in all areas of media, but we all know it's bullshit. "I won't listen to AAC format music, it's not as good as vinyl!" - Sent from my iPhone or iPod touch. "Downloadable games are the devil, they'll never replace discs in my heart!" - a guy with fifty XBL games on his hard drive, or a big fat Steam account. "You'll NEVER take away my Blu-Ray!" - a guy with a Netflix account on which he watched the entirety of Breaking Bad.
I'm sure some of you guys are serious about it, but you're outliers, and as Robocop pointed out, outliers are not the concern of the corporate office. By taking music sales to the digital format, Apple has increased it's stock value to a point where a single stock is worth more than the average american brings home in a week, before taxes. Steam, a closed system where transfer of purchased and redeemed titles is impossible, is worth more per employee than Apple, though they're privately owned and therefore attract less attention. Amazon has arguably saved it's business with the Kindle, another closed system for reading eBooks: they've attracted direct competition from Barnes & Noble with the Nook, while Apple and Google have made a lot of noise about the eReader capabilities of their tablets.
There are good reasons why this is inevitable. Costs for the manufacture of physical media are entirely eliminated by putting a file on a server somewhere. Costs to transport and distribute are entirely removed, and the middleman cut that retailers get is no longer an issue. The data you submit when you open an account or make a purchase allow companies to market to you more effectively, and give insights as to what future products might do well. Less overhead, more information, higher profit margins? Done and done!
Most of you will grumble and fork over your money regardless. A small, tiny percentage will actually quit, and that's OK in the eyes of the these companies: all your kids will be entering adulthood soon enough, and they've never known physical media; they don't have CD collections, and the DVDs they have are rare and limited to absolute favorites. All their media is on a hard drive, and they like it that way. Getting their games that way won't bother them.
Some think that's a bleak future, but whatever. It's not. You don't technically own the games sitting on your shelves, as the legal garbage in the licensing agreement will happily point out if you were to read it. I have close to two hundred games on Steam, and while I've paid full price for a few of them, most were obtained on heavy discount during their frequent sales. There's not much difference between buying Space Marine on Steam for ten bucks, and buying it for ten bucks in the clearance bin at Target, except you didn't spend the gas money to drive to Target. Microsoft, Sony and Nintendo haven't quite figured that out yet, but they will.
I have a sizable collection of physical games, and I like having them there on the shelf, but realistically a huge shelf of games isn't much different from a list on a client. I'm probably not going to play most of either stack.