Retailers aren't really the only thing holding them back. It's not currently viable to go download-only because a good portion of consumers (including a lot of America) doesn't have access to internet fast enough to make digital distribution a) more convenient than brick and mortar stores or b) even viable, in some cases. I know that my father (who lives in a suburb of Dallas, one of the most tech-based cities in the US outside of Silicon Valley) is still limited to a 1.5 Mbps internet plan, simply because the infrastructure doesn't exist there. My sister's boyfriend actually lives in the upscale neighborhoods in Dallas, and he's limited to a 1.5 Mbps plan as well. He lives within a block of
Ross Perot. And my internet rapes his in every orifice regularly while its husband watches from the corner.
So by my estimates, it'll be a few more years before we're seeing widespread adoption of digital distribution to the point where we have a successful no-physical-media console. So most likely in the next hardware cycle.