Just like floppy disks gave way to CDs, then CDs to DVDs, followed by USB flash drives and SD cards, the time of game discs has an end in sight. Mind you, there's still a great need for them right now in the console and portable games world, but services like Valve's Steam on the PC (and now Mac) side have shown--in just a few years time--that the packaged game can make a graceful transition to the digital storefront.
What's more interesting, however, is the wave of new technologies that compete with Steam, and other download services like it--not only for PC games, but for console titles too. These streaming technologies, which include names like OnLive, Gaikai, Otoy , and InstantAction, promise to free us completely from the need to download software in the more traditional sense, and instead stream titles from a server cluster hundreds or even thousands of miles away from where you play them.
In a few months time (when this technology is more common) it will give you, the consumer, an alternative to buying new gaming hardware, while at the same time letting you pick up and play a new game on just about any Internet-connected device. Such a model may turn the gaming hardware industry on its head, but it opens up new avenues of utility for tablets, mobile phones, and even that 5- or 6-year-old computer that would have otherwise been hopelessly unable to run most modern-day titles.