Sega recently announced that their new expansion to Phantasy Star Universe — Ambition of the Illuminus — will be downloadable over Xbox Live this fall. The expansion will also be available for the PS2 and PC in disc form, so I assume that Sega hit the same developmental roadblock that Bethesda did with Shivering Isles.
I suppose making the title download-only does limit your potential customers (though I doubt many Phantasy Star players are without broadband access) but I think that it's an improvement over the retail process — who needs another game box cluttering up the shelves? (And who wants to pre-order at EB?)
via Gamasutra