According to a recent article, the game Magicka is nearing 800,000 copies sold, 90% of which were digital downloads, primarily via Steam.
Source: http://www.gamasutra.com/view/news/36582/Paradox_Magicka_Nearing_800K_Sales.php
Do you think digital downloads are becoming more popular? Have you ever bought a game via digital distribution platform?
Huh, Magicka had physical copies?
Personally, I wouldn't base overall adoption of "digital distribution" on the stats for smaller "indie" games, since they tend to have much higher % of digital sales (up to 100%, for ones that are ONLY sold digitally.)
Have I bought games digitally? Yes - mostly small or old (and therefore, both smaller and hard to find on disc) games. Minecraft, Bejeweled, Dungeons of Dredmor, Deus Ex..... I bought the Mac version of Dragon Age Origins digitally, because I had no other choice.
And yes - at least among the folks on internet forums, they're becoming more popular.... but, of course, those people tend to be the ones sitting on fat pipes, for whom downloading 10+GB isn't something they have to think about.
Me? I'm not a huge fan - if I can buy a game physically, I will. Especially larger games - I don't consider a 2GB download to be something to just casually do. Let alone 5-10GB.
My personal view is that the push for "It should just be Digital!" can't happen until my country (US) has a decent national broadband framework, with regulation as a public utility - until then, there are too many places where the "competition" of all our little ISP semi-monopolies just don't provide people with good enough service to support a all-digital world.