Sony is preparing to wind down and ultimately conclude its manufacturing of physical PlayStation games in 2028, we learned today.
This marks a massive sea change for the games industry, even after years of declining physical sales. Already, the internet is deeply unhappy about it, but the move also opens up a ton of far-reaching questions around which companies will follow suit and how fast, how this will impact pricing and sales, who benefits, and who loses out.
We here at Kotaku have once again scrambled the expert analysts to try to get what answers we can, even as the industry becomes more and more chaotic and unknowable by the day. Here’s what they told us:
What does this actually mean?
With Sony preparing to end physical disc production in 2028, analysts say there will be quite a few knock-on effects beyond just the straightforward “no more physical PlayStation games.”
For one, analysts say the PlayStation 6 and Xbox’s Project Helix are almost certain to launch with no disc drive at all. That will leave players with large libraries of physical games for previous consoles totally unable to play them on the new systems. Daniel Ahmad, director of research and insights at Niko Partners, said that 70 million physical PlayStation games were sold last year, and around 500 million have been sold during the current generation. That’s no small amount. Analysts suggest this could lead Sony to try various methods of helping gamers bring their collections forward, such as an add-on disc drive or some type of disc-to-digital conversion program.
The former of those will almost certainly cost money, and the latter might, too, which is likely going to frustrate PlayStation gamers further. Rumors and reports circulating that the next PlayStation could cost as much as $1,000, combined with its lack of backward compatibility for physical games, might be a dealbreaker for many if Sony can’t find a way to ease the transition.
“I’m hoping they’ll use that extra margin to lower the cost of their devices,” said Joost van Dreunen, NYU Stern professor and author of SuperJoost Playlist. “With a $1,000 console as a new reality, console manufacturers are looking for ways to control costs. Stripping 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 extra margin on its software. As things stand now, it’s expensive for companies to make physical games, fewer and fewer people are buying them, and when they do, publishers are making less money off them than they’d like.
Various analysts I spoke to gave me slightly different figures and metrics on this, all pointing to the same conclusion. Piers Harding-Rolls, an analyst at Ampere Analytics, shared data saying that only 13 percent of total full game unit sales were digital when the PS4 launched in 2013. In 2025, that share had rocketed to nearly 80 percent. Ahmad noted that share was 85 percent in Sony’s most recent quarter, and that Xbox digital sales were around the 90 percent mark. James McWhirter at Omdia countered that Sony’s percentage translated to around 200 million physical games sold last year, “a not-insignificant number” that the company certainly hopes to translate into digital sales that it can make more revenue on per copy sold.
Because it is so, so much more expensive to produce a physical game. Kantan Games’ Dr. Serkan Toto estimates that PlayStation makes roughly 50 percent more revenue when selling a first-party game digitally rather than physically. That money comes from a number of sources. It’s expensive to actually manufacture and produce a disc, then to box it and ship it and stock it in retail stores who then receive a cut of the profits. That disc can then be resold via the used market, which gets a copy of the game into a new person’s hands without Sony being involved at all.
“Everything Sony gains from killing the disc flows from the fact that a disc is a unit of value the platform holder stops earning from the moment it’s first sold,” Rhys Elliott, head of market analysis at Alinea Analytics, explains. “A disc can be resold or rented a hundred times, and Sony sees revenue from exactly one of those transactions. Every resale and rental is value flowing to players and retailers instead of to the platform. Without discs, that converts into a fresh 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 happens to my local video game store?
So, uh, speaking of that second-hand market! It’s, uh, not looking good.
If neither Sony nor Microsoft includes a disc drive in their next-generation consoles, that’s going to hurt the retail games market something bad. And over time, it will also likely fully undermine the pre-owned market.
Not that either of those markets were doing well to begin with.
“Many of these chains have massively reduced in size compared to two decades ago and have diversified their businesses to deal with the shift to digital sales,” said Harding-Rolls. “Calling time on physical media will mean innovating around digital games sales in-store to try and replace lost business. Overall, putting retail sales on a stronger commercial footing may prompt publishers to keep selling in shops for longer than they might have done under the current conditions.”
Analysts I spoke to suggested we may see more sales of digital codes in boxes, or special collector’s editions of games (again, with digital code). That won’t work for everyone. McWhirter called out the impact on specialist publishing labels like Super Rare Games, Red Art Games, and Limited Run, as well as the small and mid-sized games that gain enough fame to warrant physical editions from those labels post-launch.
“Renowned digital-only games have been re-released post-launch as collectible packaged versions via specialist publishing labels,” he said. “A move away from physical hurts this opportunity. Not including the full game with a collector’s edition is also a huge blow in the appeal of these releases to the collectors’ audience they target. And with PlayStation out of the equation in future, less units can be sold, hurting the viability of each new release. We expect boutique physical-first publishers to transition toward embracing 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, publishing roles—any of these could stave off the bleeding for a while, but the suffering will continue regardless. “There is absolutely nothing retailers can do,” said Toto. 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 into a cryptocurrency-based private equity fund with ambitions to acquire eBay, I think it’s safe to say that it has only a passing interest in video games anymore.”
Are physical games dead yet?
So…is this it? Is this finally the fabled death of physical games we’ve been wondering about for years now?
Maybe. If so, it’s a death one could have seen coming a mile off, said Elliott. “This didn’t come out of nowhere,” he said. “Just last week Rockstar confirmed that GTA 6 would ship with no disc, just a digital version and a code in a box at retail. We argued that the biggest game in the world going disc-less was less a one-off and more a starting gun. Seven days later, Sony fired it. 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 quippy variations on the metaphor to explain what they meant, and not all of them took it the same way.
The most common view among those I spoke to was that while this move by Sony significantly accelerates the ongoing decline of physical games, they aren’t literally vanishing tomorrow. How long their wispy ghost will hang around the industry is a different question.
“Sure, this is one of the nails, but coffins are big and need several nails?” said Piscatella. “Or something. Not sure about this analogy, to be honest. A lot of players will be very unhappy with these decisions (and understandably so!). But physical media in video games will only last so long as the console manufacturers allow it to, and we’re now one step closer to its death. It’s a sad day in the world of video games.”
Van Dreunen took it differently, saying that 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 shift toward digital distribution for years, and it has taken time to normalize the idea of content being delivered via download rather than physical ownership. However, I don’t believe that physical game sales will go away. In fact, I predict that physical copies will soon be reinvented as a premium tier for die-hard fans, because they can be made artificially scarce, have collectible value, and carry a deep sense of nostalgia among a large subset of gamers. By comparison, in the music industry, physical sales account for just under 12-percent of annual sales in the United States. Three-quarters of physical music sales are vinyl. It speaks to a deliberate, premium experience.”
As for the rest of us…
Elliott, in his response to me, pointed out two other additional impacts of physical games vanishing that I hadn’t considered in my questioning.
The first is the prospect of further price hikes. Even though companies like Sony would save money from this change, it also puts them in significantly more control of things like discounts, and (as mentioned) removes the possibility of cheaper, used copies.
“Sony owns the entire price curve when things are all digital, like how high a game launches, how long it holds that price, and how much and when it ever discounts,” Elliott said. “Now that the base price of massive-IP games is $80, that control is worth a bloody fortune.
“I’ve been looking at a lot of the reactions online, and the throughline in the community since the announcement is some version of ‘so much for games ever going on sale again.’ That instinct is correct.
“This move is all about profitability and control for PlayStation, at the expense of consumer choice.”
That’s frankly terrifying news for consumers given how expensive everything’s been getting lately. Elliott did have one possible upside to all this to mention, though, and that was for game developers:
“Before you can press a disc, you need a gold master that clears first-party certification, which has to happen about three months before the ship date,” he said. “On paper, that means a finished, cert-ready build of a game a quarter of a year before anyone’s meant to play it. The reality is that already-stressed devs throw together a rough, held-together-with-tape build whose job is to survive cert, get it stamped, and then actually ship the game via a mandatory day-one patch.
“This is how it’s often done in AAA, but assembling those builds pulls the team’s attention onto cert box-ticking tasks that should come after the core development, like controller-disconnect handling, storefront compliance, edge-case plumbing, and all that. Polish can be the difference between a clean release and a rocky one, so technically a digital-only title can punt the ‘final’ build much closer to launch. For a studio up against the wall (read: all of them…) that flexibility could mean the world. So that’s one silver lining.”
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