Sony is I am preparing to end my activities and finally conclude its manufacturing of physical PlayStation games in 2028, we learned today.
This marks a sea change for the video game industry, even after years of declining physical sales. Already, The Internet is deeply unhappy about thisbut the move also raises a ton of wide-ranging questions about which companies will follow suit and how quickly, what impact it will have on prices and sales, who will benefit and who will lose.
We here at My city We’ve once again scrambled the expert analysts to try to get the possible answers, even as the industry becomes more chaotic and unknowable by the day. Here’s what they told us:
What does this actually mean? As Sony prepares to end physical disc production in 2028, analysts say there will be many repercussions beyond just “no more physical PlayStation games.”
On the one hand, analysts say it’s almost certain that the PlayStation 6 and Xbox’s Project Helix will launch without a disc drive at all. This will leave players with large libraries of physical games for previous consoles completely unable to play them on the new systems. Daniel Ahmad, director of research and insights at Niko Partners, said 70 million physical PlayStation games were sold last year, and around 500 million have been sold in the current generation. It’s not a small amount. Analysts suggest this could lead Sony to try various methods to help gamers advance their collections, such as an add-on disc player or some type of disc-to-digital conversion program.
The first of these will almost certainly cost money, and the second might as well, which will likely frustrate PlayStation gamers further. Rumors and reports circulating that the next PlayStation could cost as much as $1,000, combined with its lack of backwards compatibility for physical games, could pose a barrier for many if Sony doesn’t find a way to make the transition easier.
“I hope they use this extra margin to reduce the cost of their devices,” said Joost van Dreunen, a professor at NYU Stern and author of SuperJoost Playlist. “With a $1,000 console the new reality, console makers are looking for ways to control costs. Removing discs improves margins but will likely require greater storage capacity, which is also increasingly expensive.”
Why is this happening? As van Dreunen mentions, skipping physical games gives Sony significant additional headroom on its software. As it stands, it’s expensive for companies to make physical games, fewer people buy them, and when they do, publishers make less money than they’d like.
The different analysts I spoke with gave me slightly different numbers and metrics on this, all pointing to the same conclusion. Piers Harding-Rolls, analyst at Ampere Analytics, shared data claiming that only 13% of total full game unit sales were digital when the PS4 launched in 2013. By 2025, that share had climbed to almost 80%. Ahmad noted that share was 85% in Sony’s most recent quarter and that Xbox digital sales were around 90%. Omdia’s James McWhirter countered that Sony’s percentage translated into about 200 million physical games sold last year, “a sizable number” that the company certainly hopes to translate into digital sales on which it can generate more revenue per copy sold.
Because it’s so much more expensive to produce a physical game. Dr. Serkan Toto from Kantan Games estimates PlayStation generates around 50% more revenue when selling a first-party game in digital form rather than physical. This money comes from several sources. It is expensive to manufacture and produce a disc, then package, ship and store it in retail stores who then receive a share of the profits. This disc can then be resold via the second-hand market, putting a copy of the game in the hands of a new person without Sony being involved at all.
“Everything Sony gains from killing the disc comes from the fact that a disc is a unit of value that the platform holder stops earning from the moment it is first sold,” explains Rhys Elliott, head of market analysis at Alinea Analytics. “A disc can be resold or rented a hundred times, and Sony receives revenue from exactly one of those transactions. Each resale and rental represents value that accrues to players and retailers rather than the platform. Without discs, this either turns into a new full-price digital sale or it doesn’t happen at all, and both outcomes obviously suit Sony better than a thriving second-hand market.”
What’s happening to my local video game store? So, uh, speaking of that second-hand market! It doesn’t look good.
If neither Sony nor Microsoft include a disc drive in their next-generation consoles, it will seriously hurt the retail gaming market. And over time, it will likely undermine the second-hand market altogether.
Initially, none of these markets were doing well.
“Many of these chains have significantly reduced their size from twenty years ago and diversified their businesses to accommodate the shift to digital sales,” Harding-Rolls said. “Taking time on physical media will mean innovating around in-store digital game sales to try to replace lost sales. Overall, giving retail sales a stronger commercial foundation could incentivize publishers to continue selling in stores for longer than they might have under current conditions.”
Analysts I spoke with suggested that we could see more sales of boxed digital codes or special collector’s editions of games (again, with digital code). This won’t work for everyone. McWhirter highlighted the impact on specialty publishing labels like Super Rare Games, Red Art Games, and Limited Run, as well as small and mid-sized games that gain enough fame to warrant physical editions from those labels post-launch.
“Well-known digital games have been re-released after their launch as collectible versions through specialist publishing labels,” he said. “Moving away from physical hurts this opportunity. Not including the full game in a Collector’s Edition is also a major blow to the appeal of these releases to the collector audience they target. And with PlayStation out of the equation going forward, fewer units can be sold, hurting the viability of each new release. We expect physical-first publishers to adopt traditional publishing roles. This is already happening – Red Art Games handled the development of Super Bomberman Collection for Konami.
Digital codes in boxes, collector’s editions, publisher roles: each of these elements could prevent the bleeding for a while, but the suffering will continue regardless. “There’s absolutely nothing retailers can do,” Toto said. Stores like GameStop will have to adapt to selling other things, or die.
Then again, van Dreunen doesn’t “think there’s any love lost here.”
“Seeing GameStop’s transition to a cryptocurrency-based private equity fund with ambitions to acquire eBay, I think it’s safe to say it now has more than a passing interest in video games.”
Are physical games dead yet? So… is that it? Is this finally the legendary death of physical games that we’ve been wondering about for years now?
Maybe. If that’s the case, it’s a death you could have seen coming a mile away, Elliott said. “This didn’t come out of nowhere,” he said. “Last week, Rockstar confirmed that GTA6 would come with no disc, just a digital version and code in a retail box. We argued that the world’s greatest discless game was less a one-off play than a kickoff. Seven days later, Sony fired him. It’s not a coincidence…”
When I asked analysts about this specific question, I phrased it as “the final nail in the coffin.” Several came back to me with pleasant variations on the metaphor to explain what they meant, and not everyone took it the same way.
The most common opinion among those I spoke to was that while this move by Sony significantly accelerates the current decline of physical games, they won’t literally disappear tomorrow. How long their wispy ghost will linger in the industry is another question.
“Sure, it’s one of the nails, but are coffins big and need multiple nails?” Piscatella said. “Or something like that. I’m not sure about that analogy, to be honest. Many gamers will be very unhappy with these decisions (and understandably so!). But physical media in video games will only last as long as console makers allow it, and we are now one step closer to its death. It’s a sad day in the gaming world.”
Van Dreunen took it differently, saying the coffin “has been in the ground for some time now.”
“Technological progress tends to move faster than social change,” he said. “Audiences have resisted the move to digital distribution for years, and it has taken time to normalize the idea of content released through download rather than physical ownership. However, I don’t believe that physical game sales will disappear. In fact, I predict that physical copies will soon be reinvented as a premium tier for die-hard fans because they can be artificially rare, have collectible value, and carry a deep sense of nostalgia among a large subset of gamers. In comparison, in the music industry, Physical sales represent just under 12% of annual sales in the United States. Three-quarters of physical music sales are vinyl. a deliberate, premium experience.
As for the rest of us… Elliott, in his response, pointed out two other additional impacts of the disappearance of physical games that I had not considered in my questions.
The first is the prospect of further price increases. While companies like Sony would save money with this change, it also gives them a lot more control over things like discounts and (as mentioned) removes the possibility of cheaper used copies.
“Sony owns the entire pricing curve when everything is digital, like how much a game launches, how long it maintains that price, and how much and when it offers discounts,” Elliott said. “Now that the base price of massive IP games is $80, this control is worth a damn fortune.
“I looked There’s been a lot of reaction online, and the common thread in the community since the announcement has been a version of “too bad the games are on sale again.” This instinct is correct.
“This decision is above all a question of profitability and control for PlayStation, at the expense of consumer choice.”
This is frankly terrifying news for consumers given how expensive everything has become lately. Elliott did have one possible upside to all of this to mention though, and it was for game developers:
“Before you can press a record, you need a gold master to get first-party certification, which has to happen about three months before the ship date,” he said. “On paper, that means a completed, certification-ready version of a game a quarter of a year before anyone is supposed to play it. The reality is that already stressed developers create a pre-release version, assembled with tape, whose job is to survive certification, get it stamped, and then ship the game via a mandatory patch on day one.
“This is how it’s often done in AAA, but assembling these builds focuses the team’s attention on certification tasks that should come after main development, like handling controller disconnects, storefront compliance, advanced plumbing, and all that. Polishing can mean the difference between a clean build and a rocky one, so technically a digital-only title can bring the “final” build much closer to launch. For a studio up against the wall (read : all…), this flexibility could mean the world. So it’s a glimmer of hope.