Physical vs. Digital

I created this list in response to a Reddit post once, and I thought it would be worth keeping around. If you've followed this blog for any length of time, you probably know by now that I don't have a very high opinion of "digital distribution" when it comes to video games (i.e., games that are sold without any physical medium, just downloaded over the internet via your account). But to prove that I don't think it's completely useless, I have a list of the pros and cons of each. I may update this list as new information comes to light.

Note that this list was created in the Xbox One subreddit, so some of these items may be specific to that platform.

Physical Discs

Advantages

• You can loan, rent, share, sell, or give away discs, to anyone at any time.
• You can return the game to the store if it doesn't work, or if the purchase was accidental. [Though Microsoft will be allowing digital returns within 14 days and under 2 hours of play soon.]
• You can play them on any Xbox at any time, no matter who is signed in.
• Installing is faster, since the bits are installed from the disc instead of downloaded over the internet. (Though large day-one patches that have to be downloaded may negate this advantage somewhat.)
• If your account is stolen, hacked, or banned, you still have your games.
• If Xbox Live goes down at any point in the future, your ability to play your games won't go with it. (The ongoing support of 360 games suggests this won't happen anytime soon; though history shows it has happened before.)
• Prices in physical stores tend to decay over time, as retailers try to move inventory.

Disadvantages

• If the disc is lost, broken, or stolen, your license to play is gone.
• Can't simultaneously share a single copy with more than one person.
• Have to change discs to change games. (While this may not seem huge when you're physically at the console, it's much bigger if you're away from the console, like with the streaming to Windows 10 feature.)
• In order to play the game on any console (e.g., visiting a friend), you must bring the disc.

Digital Downloads

Advantages

• No physical item to lose/maintain.
• One copy of the game can be played on two consoles simultaneously — the one you're signed in on, and the one you've chosen as your "home console". (Although this isn't strictly endorsed by Microsoft as a way to share with someone outside of your household, they have so far turned a blind eye to this "game sharing".)
• Not having to insert the disc to play. (The Windows 10 Xbox app feature of being able to remotely connect to your Xbox, start a game, and stream it to your PC or tablet, makes this even more convenient, as the disc doesn't have to be in the drive already.)
• You can purchase (and in many cases, pre-purchase) games, and the console will automatically download and install them, instead of waiting for you to insert the disc before it can install.
• If you sign in on any console, you can download and install the game and play it there (without having to bring along a physical disc).
• Any console that has the game installed already, you can play it on when you sign in (as long as you're connected to Live).
• Some titles you can purchase once and have the ability to download/play on multiple platforms (Xbox "Play Anywhere" titles that can be played on the Xbox and PC).

Disadvantages

• You cannot transfer the license to another person, temporarily or permanently.
• Officially, no refunds — all sales are final. (Some have managed to get refunds from Microsoft on some occasions, but it can be dependent upon a roll of the dice as to what customer support person you end up talking to, and whether or not you've had to ask more than once.) [Though Microsoft will be allowing digital returns within 14 days and under 2 hours of play soon.]
• The license to play is limited to at most two consoles at any one time — your "home console", and the console on which you're signed in. It cannot be shared with someone (other than you) on a third console, unless you sign in there yourself, too.
• If you reassign your "home console" to a friend (i.e., use this feature as a form of game sharing), you can't play your own games if your internet connection goes down.
• If your account is stolen, hacked, or banned, you lose access to your games.
• Microsoft can revoke your license to play at any time. (Some people got lucky enough to "buy" a digital game for a deep or complete discount from the digital store due to an error on the website, only to find the game purchase revoked when the error was corrected — even though the item was downloaded, they could no longer play it. Xbox Fitness content that was purchased, was inaccessible when Microsoft discontinued the service.)
• Prices for digital versions do not decay over time as quickly or as frequently as their physical counterparts. (It's not unusual to see an item of downloadable content never go on sale from its original price.)

For me, it's all about simplicity and freedom — the ability to share my content with my family any way I choose, without having to manage my licenses via some external party. As it stands now, if I wanted to put an Xbox in what we call the "teen room", no one there would be able to play anything I bought digitally. (Unless I made that my "home console" — but then no one would be able to use anything I bought digitally on the main TV in the family room.) Consoles in my house are not personal devices. They are shared, family devices; and anything that restricts my ability to share content with my family across those shared devices isn't a convenience, it's a hindrance.

Updated May 2017 to include Microsoft's new policy on returns of digital games.