Digital futures are fine. But I don't think a company like MS fully understands what it takes to provide a digital future that is an adequate replacement for physical media based games.
Valve has most or all of it figured out. Digital delivery. Easy downloads. Lower prices. Embracing indie games. Discounts on bulk purchases. And so forth.
Steam games have a lot of the same limitations that the xbox one would have had but you don't see nearly as many people complaining about that. And that's because of all of the things listed above.
There are tons of console games that I and many of my friends have grown to love which started off as borrowed games. And that's, I think, how it should be, the same as books. I don't think Steam is the perfect answer for all of time but the fact that you can acquire games at effectively used prices or lower (sometimes $15 or even $5 for a AAA title or even as little as one or two dollars for an indie game) significantly blunt the problems of reduced lending opportunities.
P.S. For clarity I'm saying that being allowed to lend and borrow games is a huge benefit to game makers because it is a very potent way of increasing the fan base. How many people borrowed someone else's copy of Harry Potter and then went on to buy hardback copies of subsequent books as they came out and watched the movies and so forth? The same phenomenon works just as potently with games. There are several people I know who are fans of the Mass Effect series who might not have been if they couldn't have borrowed the game that first time.
With art the best salesman is the thing itself. That's how radio works. That's how museums work. And libraries. How do you convince someone they like Manet or Picasso or The Fiery Furnaces or Gershwin or Raymond Chandler or HP Lovecraft or Katamari Damacy or The Last of Us? There is no possible way to adequately describe such works in words alone. The only possible way to determine if one likes such things is to experience it first hand. And that is why "piracy", even in its most extreme forms, is never going to be as much of a threat to makers as some people believe. "Consuming" art makes fans, and fans with money will spend their money to acquire art by artists they enjoy, whether it's games, concerts, movies, albums, and so forth.