PlayStation: Decision to Abandon Physical Support Threatens a $7.2 Billion Business

The decision by the Japanese multinational Sony to stop producing physical discs for new video games intended for its PlayStation consoles has generated unexpected repercussions. This measure will lead the popular "Play" towards an almost entirely digital model that, analysts warn, threatens the survival of a global used video game market currently valued at around $7.2 billion.

The transformation does not mean that games already released will disappear from stores or that existing discs will stop working. Titles published before the cutoff date will still have physical versions.

The change fundamentally affects new releases after January 2028, which will be distributed through PlayStation Store and other digital channels.

Sony's economic argument is that consumers have already massively migrated to downloads, and therefore the company has fewer incentives to maintain an industrial and logistical infrastructure aimed at manufacturing, packaging, transporting, and selling discs.

And the numbers seem to support this: in the last quarter of its fiscal year ending in March 2026, 85% of complete game sales for PlayStation 4 and PlayStation 5 were digital, while for the entire fiscal year, the proportion reached 78%, a historic high for the company.

Just a decade ago, the scenario was very different: digital sales represented around 19% of PlayStation game sales.

Growth accelerated especially during the pandemic and continued afterward, driven by downloads, online promotions, subscriptions, and the expansion of disc-less consoles.

Blow to an Economic and Cultural Ecosystem

However, the end of physical discs has a consequence that does not directly appear in Sony's accounts: the secondary market. Used games depend on the existence of physical copies that can pass from one owner to another. A player buys a title, uses it, and can later sell it, trade it for another, or give it as part of a payment. That copy continues to circulate and generates income for stores, distributors, and specialized operators long after the first sale.

This circuit is precisely what analysts consider threatened. According to estimates from the consulting firm Dataintelo cited by specialized media, the global market for second-hand video games currently moves around $7.2 billion and could reach $13.8 billion by 2034 if it maintains its growth trajectory.

However, the gradual disappearance of physical support threatens to completely change that projection.

Michael Pachter, an analyst at the financial advisory firm Wedbush Securities, provides a perspective with strictly economic logic. He argues that the problem is not limited to companies that buy and sell used video games.

He states that the physical market has a function within the ecosystem because exchange and resale operations allow consumers to recover part of their invested money and use it to buy new titles. If that possibility disappears, it also modifies purchasing behavior and affects the very origin of the business.

A similar view is held by Kazunori Ito, an analyst at Morningstar, who believes that the used game market will continue to shrink until it eventually disappears.

This forecast is particularly relevant for specialized physical stores, whose business has been built over decades around the sale, repurchase, and exchange of video games and consoles.

An inevitable, but not sudden transformation

Nonetheless, analysts clarify that the threat is not immediate. For several years, millions of PlayStation 4 and PlayStation 5 discs will coexist in circulation, in addition to the games released before 2028.

Therefore, the used market will not disappear overnight. What will change is that it will stop receiving a permanent replenishment of new physical products, a condition essential for the business to sustain itself in the long term.

The phenomenon has also been approached from another angle: the speed at which the physical market is declining. According to data from Circana released by analyst Mat Piscatella, only seven PlayStation games had sold more than 100,000 physical copies in the United States during 2026 up to mid-July.

At the same time, the U.S. physical video game market in general would have dropped from about $11.5 billion in 2009 to about $1.6 billion in 2026.

This contrast shows the dilemma Sony faces. On one hand, there is a community of consumers demanding that discs remain available, both for collection reasons and for the possibility of reselling, lending, or exchanging games.

On the other hand, the sales figures themselves indicate that the majority of players have already chosen the digital format.

Impact on Costs, Prices, and Profits

The situation also directly benefits Sony from a profit margin perspective. Electronic Arts, one of the largest U.S. video game publishers, estimated that in its fiscal year 2026, 81% of units sold on PlayStation 4, PlayStation 5, and Xbox One/Series were digital, compared to 78% in the previous year.

The company explains that digital distribution has lower costs than traditional sales through manufacturers, distributors, and retailers, which helps to widen the gross margin.

For Sony, there is also another advantage: control over the relationship with the consumer. When a game is purchased in physical format, the publisher, the disc manufacturer, the distributor, the retailer, and eventually the used market are involved. In contrast, a download from PlayStation Store places Sony at the center of the digital transaction and significantly reduces the number of intermediaries.

The change also has implications for pricing. The physical disc allows for price comparisons between different retailers and the option to buy a used game or wait for sales.

In contrast, in the digital environment, the offer is much more concentrated, and Sony's ability to control promotions, discounts, and availability is considerably greater.

The transition to the new model, therefore, not only modifies how the video game is delivered, but also who controls the economy after its release.

The paradox is that players may end up having more access to video games while simultaneously having less ownership over them. A disc is an object that can be preserved for decades, sold, lent, or collected. A digital purchase depends on an account, a platform, and the conditions under which the provider keeps the content available.

This is not a minor detail for users. The problem became very concrete after Sony recently announced that it would remove hundreds of movies from users' digital libraries on PlayStation due to the termination of licensing agreements.

Although this is a different business from video games, the episode fueled the discussion about the limits of so-called digital ownership: paying for content does not necessarily mean having an object that can be preserved independently of the platform.

The issue of preservation is particularly sensitive in video games. When a disc stops being manufactured but continues to circulate, there exists a physical copy that can be used even when the game is no longer sold.

In the exclusively digital model, however, preservation depends on companies maintaining operational servers, authentication systems, and online stores.

Now the company has begun to prepare for the gradual closure of the PlayStation Store for some older platforms like PS3 and PS Vita, initially in certain markets, with an expansion planned to other countries during 2027.

Previously purchased content will remain accessible, it clarified, but this change has been interpreted by users as further evidence that digital ecosystems also have a lifecycle.

Busy but not worried

Some well-known voices in the global video game market have offered a less catastrophic view of the matter. Yves Guillemot, CEO of Ubisoft, recently stated that Sony's decision has advantages and disadvantages, but that it probably will not cause a major disruption in the industry.

This expert argues that sales platforms like Steam have shown that the video game business can grow even after the abandonment of physical media.

From the traditional brand Sega, its president Shuji Utsumi took a nuanced position: he acknowledged the strategic importance of the shift to digital, but also pointed out that the company continues to value the culture associated with physical format.

The stance reflects a controversy currently involving the entire industry: the digital economy is more efficient for manufacturers, while physical media still holds cultural and commercial value for a significant portion of consumers.

Even some independent developers argue that the disc continues to fulfill functions that the digital format does not completely replace. Zhenghua Yang, founder and CEO of Serenity Forge, noted that physical editions allow reaching consumers who buy in stores, have difficulty accessing the Internet, or simply consider video games collectible objects. For these studios, both formats can function as complementary.

The market, however, seems to be taking a direction that influences companies' decisions. Sony itself is already selling part of its consoles without a disc drive, and the PS5 Pro is marketed without an optical drive included as standard.

Microsoft has advanced even further in this direction, and a significant proportion of Xbox Series consoles also lack a disc drive. According to data cited by Circana, more than half of the Xbox Series consoles in the United States and approximately a quarter of PS5s do not have a disc drive.{#p-1785170061825-7793}

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