I would have no problem with digital if it was actual ownership instead of licensing

Considering digital games are the same price as physical currently they could do it as a free service

Digitize game disc to my account

Resell

Second hand buyer tries to play disc

Can

If you actually read the article before getting mad, you'd have realized this is actually better than simple physical media. You get the advantages of both physical (ownership, lending, reselling) and digital (play on multiple devices, no risk of damaging your disc).

Nah, you just have to drink a verification can.

Oh, don't worry. They won't work anyways after a firmware update.

I'm going to suggest that they can already do this.

We know that Xbox won't let you use a second account to play games you purchased on your original account on the same device. One way to get around this was to use physical disks. But there's no stopping them from modifying the OS to read a disk already registered with one account and prevent that disk/key from being used on another account.

They are taking a shortcut though (probably to cut out the resale market) and just doing away with physical disks (just like Sony).

Sometimes we get "our competitor has made a very publicly ridiculed mistake, and now is our chance to gain favor with our audience by doing the opposite" and others it's "our competitor has made a very publicly ridiculed mistake, but we really wanted to do that so now's the chance while they're taking all the heat for doing it first"

What you're talking about is also how every physical Xbox One and Series S and X games behave. This would be, how I see it, also allow you to use the game without the disc at all and it would also be tied to your account. You can then trade the digital license, I guess.

Well that's installing from disc but still using it to play the game, a precursor to the way it continued to work on future Xboxes (with the differences that install was optional on 360, and that on later Xboxes sometimes games required a download to even install).

This rumor would have to be a step further.

Sounds to me like this is them angling for a way to advertise backwards compatibility without a disk drive. Put a disk that hasn't been "digitized" to an account in your current console, your account now has a license for the digital version. Get new console without disk drive, game is available to download as if you'd bought it digitally to start with.