One of the great problems we have today in game industry is the vast quantity of games that don't are localized or even made because they are 'niche', games with an small audience that don't justify the costs of such ventures. It is hard to convince yourself to spend a lot of money when the number of people who might buy the game is significant small, to the point where you are sure you will not see the money back.
So, many fans have a hard time to find games of certain genres, like dating sims, simulators of various kinds, JRPGs and others. In the past, games had very low costs and could recover the money it was put in them with few thousands of copies sold. There was no voice acting needing to be done, for example. Today it is pretty hard to take a game who have a restrict audience and hope to make money from it.
And so, that is why digital distribution can help such games to see the light of day. With no physical copies to be done and distributed, part of the costs in game is cut off. No discs, no boxes, no paper manual. You can sell the game directly to interested parties and cope the costs with fewer copies sold.
Not only that, certain niche games don't need to have high production costs. Dating sims, for example, don't need expensive budgets to be done. And you don't need to make new voice acting, most fans prefer the Japanese voices anyway.
RTS games don't need incredible graphics too. Simulators don't need a story mode. And by going digital, more of the money can go back to developers, if they self-publish, or for the publisher localizing the game, allowing them to be profitable without needing to sell millions of copies.
Of course, to this to happen, the owners of digital markets needs to make their services attractive. It is not good if they make too much restrictions or make the costs too high for the developers and publishers. But this can be a solution for niche fans to have easy access to such games, while those small companies can profit from them.
It is all a conjunction of factors, to this work. The small companies wishing to take a chance, the digital market owners allowing them to sell their games and the gamers buying the games. But it seems to me it could work. After all, we all have a kind of game we like but it is hard to find.