I agree that saying "everyone" will forget physical media is a stretch, based on everything already said. Also, I do think we're headed to an all digital era where physical media, as it exists today, will cease to exist.
The future of physical media will be the game consoles themselves. We will begin to see, with the closing of the Wii shop this year, that physical consoles containing games that can no longer be purchased will increase in value. Wii's with virtual console and WiiWare games that can't be purchased any other way downloaded and installed, will be sold as commodities. In 20 years, when the Switch eShop gets eliminated, Switches with Switch eShop exclusives saved and locked to the console will be worth more than the physical consoles and cartridges. The cartridges will be next-to worthless without being able to sync to the servers, but consoles with the digital games downloaded and updated will, and will still (for the most part) be playable. The consoles themselves will be the physical media. The Nintendo Classic series is another example of this, digital recreations of once physical media, put into a new physical form for novelty, but not for any practical reason.
I also think there is a stark difference between collectors and the general public. Collectors and enthusiasts will still continue to enjoy physical media and consoles, but the general public will prefer whatever is easiest (digital/emulation/mobile) even long after the gaming industry has moved to universal mobile/synced/hybrid/cloud-based platforms (which it will, undoubtedly).
I have a collection of Godzilla VHS tapes, a VHS player to watch them, and a 30 year old 200lb CRT to watch them on. But I am a rare exception while hundreds of thousands (if not more) are content to watch them for free, streaming, on Crackle on their mobile devices. This is just the reality. I will preserve and use these, but for the overwhelming majority, VHS will be as good as forgotten, probably within the next 10 years. With DVD/compact disc close behind.
Everything has its comeback, like Vinyl right now in the states and cassette tape in Japan, but it won't last more than a decade at best. Physical media will be around for a while but it will change, IMO, from being the media itself to hardware based.