@ozo: Yeah, they did. In March, shortly after the release of "The Settlers 7: Paths to a Kingdom," their servers, only two days in, went down... For about a week. This prevented anyone from playing AT ALL, single player included, even if they'd bought the game. Actually, the Pirates were the only people who could reliably play the game at this time. Their servers going down consequently prevented anyone from playing Silent Hunter 5 I believe it was, and Assassin's Creed 2 as well, one of those titles being exclusively single player. Again, Pirates prospered, and even proliferated during this time-span, as many people lost faith in Ubisoft and moved to illegitimate copies of the games just so they could play them reliably. Unfortunately, this was basically a drop in the bucket for Ubisoft. Their servers are still notorious for being the worst on the web, and many reviewers will totally advise against buying even great games from them for the PC, simply because the DRM is 'Inexcusable, Awful, Horrendous, A pure pain in the ass," and my favorite, "Total and utter crap no matter how you cut it." I pulled those from various sites btw, real reviews, all paraphrased of course.
@RFH: Actually... It always needs a physical item... The console. Every four years or so, you have to buy a new Console in order to stay up-to-date, regardless of how the games are distributed. So if we assume that all Game Distribution already was digital, you're paying 200-600$, with the current console set, just to buy a Digital Distribution Platform. For that same cost, you can upgrade your computer to play games at higher resolution and with more reliable tech-support and bug-fixes, without having to waste the extra effort of flipping on the console, logging into your XBox Live/PSN Account, and waiting what's likely to be 2 times, 3 times, or maybe even 4 times as long to download a game that you could have on your PC, DL'd and Installed in 35 minutes and good to go, with a better, more intuitive control scheme, better resolution and graphics, CHANGEABLE SETTINGS IN ALMOST EVERY AREA, (!!!!!!,) and the ability to play without voice chat without feeling like you're missing out on some part of the experience, despite the people on voice chat being 90% idiots and assholes.
Edit: Meanwhile, Powergamers and the like can just alt-tab out of the game they're playing to look up strategies, cheats, what-have-you to their game, whilst console users will have to take a step back from their game, then their console, then take a step towards the computer, and use the same process the PC Users already use anyway.
Double-Edit: Futhermore, until Consoles get access to things like Word processors, Keyboards, Mathematics Simplification Tools, and real Web Browsers, the computer at it's core is always a superior choice, simply for secondary functions like these. Consoles will also never run programs like MathCAD or your more advanced software that you use to make games in the first place, and again, with keyboard and word processors, modding is an impossibility unless those mods are already coming from the PC Communities. And could you imagine trying to accurately design Particle Effects in the Cauldron using a Paddle? What a nightmare that would be. So beyond convenience, access, functionality, and convenience, you also have to deal with design. Computers, and their games, aren't going anywhere just yet.
Triple-Edit: And it's also just occurred to me, that with the current lack of accuracy in any Console Controller, you'll never have the speed necessary to play Real Time Strategy games at anything even resembling a competitive level. RTS would have to completely die off as a genre before PC Gaming is truly in trouble, and that'll never happen.