hansrob00: Hell physical versions of pc games are still sold, granted they are pretty worthless as phsyical dvds because they are just steam codes.
I think that's the reason why physical releases are slowly going the way of the dodo. Everthing is centered around Steam or some other DRM, anyway.
Steam has essentially bred an audience that's constantly going "digital is teh future!", "I hate physical discs taking up space on my shelf!", "It's soooo convenient!" and "THE SALES, THE SALES!"
It's the same kind of audience that is partially responsible for nearly every game these days playing, looking and feeling the same, because they want everything to be standardized and cry foul if a game features a different kind of control scheme or whatever. It's all about a kind of instant gratification mentality.
Apart from the production costs for physical media, a major problem is also licensing. GOG is allowed to sell their games digitally, but retail releases would require completely new deals with the rights holders. That is, if those were even willing to agree to such a deal in any way.
Additionally, the question would be "where should these be sold?", as handling the sales laws for physical video games in all the different countries would very probably be a legal and practical nightmare.
All in all, the cost and effort required here would simply be unproportionally bigger than the market's interest is likely to be.