I have physical tokens from a couple different game CEs (2 for XIV 1.0 and 2.0) but I eventually just switched to the software version.
Pros:
1) If I ever need to log in to my account, I typically have my phone around, not so much with the physical token.
2) If I lose or break my phone, finding it or replacing the app is fairly easy (provided you kept you recovery code!).
3) If my phone battery dies I can just put it on a charger, can't charge the physical token.

Cons:
1) The likelyhood of losing my phone versus a token that I keep in or on my desk is higher, but only since I'm not taking the token out of my house.
2) If you lose your recovery code and don't have access to the App, the physical token has a serial code attached you can use to recover your account that you don't have with the app.