I make rail signalling simulations here in the UK. You can download them for a paypal fee or I can send a disk.
The one is ostensibly "almost" free (server costs - paypal cash withdraw fee - a few pennies) the other costs me rather a lot.
What difference does this make versus large retail?
Zero inventory waste, zero transport logistic cost, zero premesis rent (an ENORMOUS cost), zero retail staff ANOTHER ENORMOUS COST, zero packaging, zero third party profit requirement (Game etc do expect to make a profit you know)
I also used to work in Electronic Boutique - I know the retail cut on games - I also know the printing cost of written manuals. That's not to mention 4 or 5 retail staff and a retail premses rent of close on $100,000 per year (and that's cheap for city centre).
You should read Activisions game cost breakdown from 2008.
If it's costing you the same to distribute digitally as it does physical - then you are doing something very VERY wrong.
Scritty