Digital storefronts don't accept cash (and yet people tell me it's "legal tender" and retailers are required by law to take it.... seriously people... haha, read your laws.). This is a big thing if you're a minor because in order to get something digitally but you have no paypal or card, you have to daisy chain and buy credit at a brick and mortar store.

Finally one reason undercutting brick and mortars isn't wise... some people like having a physical copy.

Two, they provide the convenience of being able to place your game in the system or hook up your hardware to the system as soon as you get home.

Three... they accept Cash. This is VERY important for younger consumers. Remember you must be 18 to have a paypal account and a checking account must be cosigned by a parent or guardian if you're under 18. And some people just... don't have one. Hard to believe, but yes.

They do serve a purpose, believe it or not.

For one, they can provide advertising. Brick&Mortar stores run ads saying "we have these games". Sometimes they even get sent displays. Having the game on the store shelf can actually help advertise it too. (This is one thing that hurt the Vita - when most of its software was download, stores didn't have anything to put on shelves so an uninformed consumer would think the vita had no games... when it actually had a good amount.)

For one, brick and mortar stores are where the hardware is sold. Sometimes it can even cheaper to get it there. (Shipping and handling is way WAY more than Sales Tax.) If they undercut 'em, they can get revenge and say "Well we won't sell your hardware anymore. How do you like THAT?"

And they can afford to not sell games or hardware. >.>;