Why Is Sony Killing Discs? It’s “All About Profitability And Control,” Expert Says
Overview & Key Takeaways
Sony recently announced that it will stop supporting PlayStation game discs in January 2028. Even though Sony continues to sell many millions of discs, the share of digital game sales continues to rise as physical falls, and Sony cited this shift as the reason why it's going all-digital in the future. Now, Alinea Analytics analyst Rhys Elliott has weighed in with his thoughts on the matter, saying there is more to the story, and it's not necessarily a consumer-friendly decision.
"This is all about control," Elliott wrote.
He pointed out that physical game discs hold value for a company like Sony only until they're sold--rentals and resales of the same disc do not put any more money into Sony's pockets.
"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," he said.
https://www.youtube.com/watch?v=4FatSqS3VYY
Elliott went on to say that physical retail pricing is "elastic" and is based on supply and demand. This leads to an environment where pre-owned games are regularly sold for less than what Sony charges itself on digital stores. In killing discs, gamers on the fence about buying a game can no longer "just wait and buy it used," Elliott said.
"This move is all about profitability and control for PlayStation, at the expense of consumer choice," he said.
On the more positive side, Elliott said developers stand to gain from the shift away from discs. Developers need to submit "gold master" copies of their new releases for certification, and this can happen about three months before launch.
"On paper, that means a finished, cert-ready build of a game a quarter of a year before anyone's meant to play it," he said. "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."
"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," he said. "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."
Elliott also predicted that, should others embrace Sony's all-digital policy, then times might get even tougher for brick-and-mortar retailers. Rockstar's GTA 6 will be sold at physical retailers, but players are getting a code in the box, not a game disc.
"A code-in-box has none of the things that made physical worth choosing: no resale value, no lending, less collectability. The physical channel has no reason to exist, so it's the end for most dedicated games retailers. The nail in the coffin," he said.
It's not just Sony that has reported an increased share of digital games compared to physical games, as Nintendo, Capcom, EA, and others have as well.
Many expected Sony's announcement about ending support for PlayStation discs to be bad news for video game retailer GameStop, but the company's smallest business unit today is software.
Sony recently announced that it will stop supporting PlayStation game discs in January 2028. Even though Sony continues to sell many millions of discs, the share of digital game sales continues to rise as physical falls, and Sony cited this shift as the reason why it's going all-digital in the future. Now, Alinea Analytics analyst Rhys Elliott has weighed in with his thoughts on the matter, saying there is more to the story, and it's not necessarily a consumer-friendly decision.
"This is all about control," Elliott wrote.
He pointed out that physical game discs hold value for a company like Sony only until they're sold--rentals and resales of the same disc do not put any more money into Sony's pockets.
"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," he said.
https://www.youtube.com/watch?v=4FatSqS3VYY
Elliott went on to say that physical retail pricing is "elastic" and is based on supply and demand. This leads to an environment where pre-owned games are regularly sold for less than what Sony charges itself on digital stores. In killing discs, gamers on the fence about buying a game can no longer "just wait and buy it used," Elliott said.
"This move is all about profitability and control for PlayStation, at the expense of consumer choice," he said.
On the more positive side, Elliott said developers stand to gain from the shift away from discs. Developers need to submit "gold master" copies of their new releases for certification, and this can happen about three months before launch.
"On paper, that means a finished, cert-ready build of a game a quarter of a year before anyone's meant to play it," he said. "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."
"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," he said. "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."
Elliott also predicted that, should others embrace Sony's all-digital policy, then times might get even tougher for brick-and-mortar retailers. Rockstar's GTA 6 will be sold at physical retailers, but players are getting a code in the box, not a game disc.
"A code-in-box has none of the things that made physical worth choosing: no resale value, no lending, less collectability. The physical channel has no reason to exist, so it's the end for most dedicated games retailers. The nail in the coffin," he said.
It's not just Sony that has reported an increased share of digital games compared to physical games, as Nintendo, Capcom, EA, and others have as well.
Many expected Sony's announcement about ending support for PlayStation discs to be bad news for video game retailer GameStop, but the company's smallest business unit today is software.
