The fight should never have been about physical vs digital, but about ownership.
If I buy a game/movie/book/song, regardless of where or in what format, I should be able to:
1. Keep it forever without the risk of remote deletion.
2. Use it while offline, unless internet connectivity is strictly required for the experience.
3. Move it between my devices.
4. Backup and archive it.
5. Resell it.
6. Pass it on to my children.
Beyond that I don't really care what the container for the bytes is. If the game isn't sold on a disc I can easily burn my own.
Every publisher can offer all of this today, but they choose not to. And proprietary devices/formats means the free market isn't going to work in the consumer's favor. The only thing that can fix the problem is legislation.
Didn't you hear? Buying is not owning, according to these corporate criminals.
Nintendo Gamekeys check all of these boxes save one. Namely 1,2,3,5 and 6.
1. Keep it forever without the risk of remote deletion.
2. Use it while offline, unless internet connectivity is strictly required for the experience.
3. Move it between my devices.
5. Resell it.
6. Pass it on to my children.
No backup and archive is the exception. I can live with that. We'll see if Sony and Microsoft follow Nintendo or not.
I mean can't you see why 4 and 5 are irreconcilable?
I am all for 1-4 and 6. But reselling digital copies is silly.
Yes, we all know it, but good luck finding a jurisdiction that will agree with you on this.
One of the more galling aspects of the inevitable US-NATO[0] trade war is the fact that nobody is willing to reevaluate the legal underpinnings of US tech hegemony - namely, copyright and anticircumvention law. All the proposals for sovereign tech are really just "let's build more AI data centers". People like Cory Doctorow who have the actual way to play hardball with Trump - "let's get rid of anticircumvention and declare open season on AppleMobileFileIntegrity.kext" are sidelined as "IP thieves". Hell, even the Stop Killing Games people got brushed off by the European Commission with an excuse almost like "we can't mandate your game purchases work offline, that'd be stealing".
The reason for this is pretty straightforward: the moves done in the 90s to ensure digital purchases meant no ownership were as much a product of Europe as it was the US. Actually, the vast majority of international copyright law is actually a European invention, and the US was the last holdout on things like copyright registration and fixed (as opposed to life-plus) terms. Europe spent centuries binding the world to the most extreme version of copyright imaginable, specifically to ensure developing countries would never be able to actually economically develop.
Every country that has economically developed itself does so through a subsidy of IP theft. The Industrial Revolution was owned by England but stolen by America; and America itself wound up being stolen from by China, Japan, and South Korea. Economic development is not a game you win by playing by the rules, because the rules are designed to keep the winners on top. The entire debate over games preservation and ownership is downstream of the fact that the big American and European cultural industries are not financially viable without you renting your culture.
The reason why the fight has focused on physical vs. digital is that it's the one battle we've been somewhat victorious on. Physical ownership has generally been treated as sacred: Microsoft tried using the Xbox One launch as a way to massively restrict discs, and it created a backlash so large Xbox never actually recovered from it. Sony in contrast had to boil the frog[1], and Nintendo wound up doing so more or less by accident[2]. And when game consoles have problems loading physical discs, it's still treated by console manufacturers as a bug rather than a feature.
[0] In practice, the US vs. all of it's allies, including non-NATO ones.
[1] They were clearly intending to kill off discs with the PS5, just from the industrial design alone, but didn't actually do it until mid-cycle when everyone's actually bought their consoles and thus the impact would be minimized.
[2] It has been Nintendo policy since the 3DS to ban anyone who goes online with a duplicate cartridge ID. I don't think this was intended to poison the used market, but once cheap Switch flashcarts and means to clone cartridges became available, it absolutely did. The people using 3DS homebrew to load pirated games at least had to know what "public headers" meant in order to avoid getting banned.
The problem is that the technology [1] to do this simply doesn't exist. I'd say the core of the problem is that copying a digital artifact is easy, is a solved problem. You simply copy the data that represents the artifact, and now you have another copy.
*Deleting* data (and its cousin, *moving* data) is a nearly intractable problem. How can you verify that someone no longer has access to data that you gave them?
The best we have is to have some sort of ownership token that is maintained in a shared store, and build a requirement that possession of that token is required to use the data. Even this is practically nearly intractable; you have to have some sort of "trusted" hardware or software that is responsible for validating the current possession of the ownership token before using the data.
Physical media is another way of trying to solve this problem, especially if the physical media can somehow be verified and is exfiltration-proof.
[1] I say "technology" here but really I strongly suspect that this is actually impossible given reasonable theoretical assumptions around what data means.