I like physical media. A loud subset of gamers like physical media. But when you compare against Steam, it's clear what actually sells.
And not just "what actually sells", but also that digital games remove a lot of costs while consumers don't necessarily expect a discount.
There are a lot of people who wait for sales and bundles, but IMO that's more likely digital games being able to capture parts of the market that physical games struggled with rather than expecting a discount. I know I would definitely think a lot more before buying games if every title in my Steam library took up the space of even a disk.