Yes and no in my mind
Very much the case with music where physical media is usually only bought by purists/collectors etc.
But there's a large chunk of consumers who still buy blu-rays as they prefer a higher quality of video and streaming services are unreliable, downloads quickly hit bandwidth caps
In my mind as we move into 4k movies, physical media for movies will very much still be alive and not restricted like games will be
The X1 should've just been a digital only console, not that I would be any more willing to buy it mind you but at least then it's honest about its intentions
I think that there are advantages and disadvantages for both physical media and digital media. I would say that the fact that CDs somehow still exist and that
vinyl has somehow made a comeback likely means that physical media will coexist with digital media for the foreseeable future. Yes, CD and Vinyl cater to the hardcore fan, but isn't the hardcore fan more likely to spend their money on physical objects? If I'm a fan of a particular artist, a CD from Amazon would be a much more economical buy than equivalent MP3s, especially since I can rip it in iTunes. For books, it would be the same way... The hardcore fan is going to pay more to collect a physical object even if they have the digital ebook as well.
As for movies and console games, there are technical challenges for digital downloads of them as bandwidth and speeds have not caught up to support quick digital downloads. Otherwise, wouldn't Xbox One have actually gone fully digital rather than this half-and-half solution?
It's generally inherently disposable media that has been adversely affected by digital like comics, newspapers, magazines, and movie rentals. These are types of media that people subscribe to, use, and then dispose of, so digital killing the physical versions makes sense.