I prefer a physical copy, largely because of the Victorian broadband connection I have where I live and also because of the fact my 60GB PS3 has filled up so fast with patches I simply can't afford to give space to a 5GB game (or larger, which I believe the aforementioned RE5 is).
That can't be the norm for all optical media though, or most discs were already be corrupted. I have audio CD's from the 80's (the ones that were thick and heavy) that still work fine, and several CD-roms that are over 20 years old, and I've never lost anything yet that I'm aware of. I'm wondering when I can expect disc rot to do it's thing.
Like Frankie said, recordable media has a much shorter lifespan than pressed media. The disc manufacturing quality also plays a hand in how long the media will last.
Also, I've bought several CDs from the 1980's and 1990's that already show signs of bitrot / degradation. You can see pinprick holes if you hold them up to a light. A -lot- of MCA CDs seem to have that problem. One of my favorite albums, which only had a throwaway CD pressing, has rot, and I've never found a replacement copy anywhere. That's why I always copy my music to FLAC after I buy it.
No one really knows for sure, but it's a safe bet that playing games that were bought on physical media (not typically laden with DRM) thirty years from now will be easier than playing downloaded games (often laden with DRM) fifteen years from now.
Pressed discs are far more robust then recordable discs. With that said, quality, fresh CD-R and DVD-R media should hold their contents for more then a few years.
More information on the lifespan of optical media can be found here http://www.clir.org/pubs/abstract/pub121abst.html
Parts 4 and 5 are the relevant sections.
⃟Mario says "... if you do drugs, you go to hell before you die."