Analysts: Sony unlikely to reverse decision on ending physical game releases

Sony has announced it will cease releasing physical game discs for its PlayStation platform by 2028, a decision that has ignited significant opposition from players. Many users have taken to social media to voice their dissatisfaction and urge the company to reconsider.

Industry analysts, however, largely believe that Sony is highly unlikely to alter its course. Mat Piscatella, an industry advisory director at Circana, noted that only seven PlayStation game titles in the U.S. market have sold over 100,000 physical copies this year as of July 11. Furthermore, merely two titles surpassed 10,000 physical sales.

These figures pertain specifically to the U.S. market. Kim Bayley, CEO of the UK's Entertainment Retailers Association, stated that 25% of players under 25 still use physical discs. Piscatella also pointed out that the majority of game sales now derive from digital versions, highlighting that over half of Xbox Series X consoles sold in the U.S. are the digital-only versions, as are over a quarter of PlayStation 5 consoles.

Serkan Toto, CEO of gaming consultancy Kantan Games, suggested that even if 500,000 players were to cancel their PlayStation Plus subscriptions, it would represent a negligible impact on Sony. He explained that Sony boasts over 120 million active PlayStation users, with 50 million subscribing to PS Plus. A loss of 500,000 subscribers would equate to only about a 1% decline, insufficient to compel Sony to reverse its decision.

The shift to a fully digital sales model significantly enhances Sony's profit margins. For first-party titles, Sony retains nearly 100% of revenue from digital sales, compared to approximately 65% from physical copies after retailer cuts and manufacturing costs. For third-party titles like Call of Duty, Sony earns a 30% cut from digital sales, whereas physical releases only yield about 15% in licensing fees.