Why PlayStation Is Killing Discs (Despite The Fan Revolt)

Hello, One Take Shryer here. You might have heard that PlayStation last week did announce that it is discontinuing physical disc sales starting in 2028. And of course, people were perfectly fine with that. A lot of calm reactions online. A lot of people just saying, "Well, okay. That's totally fine, PlayStation. Moving on." No, that's not what happened. People freaked the F out. We saw a ton of outrage, petitions about it, a whole lot of people screaming that this is a horrible thing for customers. And there are a lot of negatives to this. I think that they've been detailed elsewhere. I won't rehash all of the all of the bad parts of this decision. I think they're pretty clear. Preser- It's a problem for preservation not having discs anymore. Digital games can just be wiped out or changed with the press of a button. Remember when Destiny was was altered to remove the voice of Peter Dinklage and now you can never play that

version again. That could happen with any digital game. No more used game market. No more borrowing games from friends or trading in games with friends. There's actually one thing that I will say that really personally really bums me out about this news, which is that I am a humongous fan of libraries. And if you live in the United States I've been speaking only about the United States. I don't really know what it's like what libraries are like outside of the US, but if you live in the United States, chances are you have a library near you that offers you a ton of awesome services that you are not fully taking advantage of. I have two small children. I take them to the library very often. They get books from there all the time. We spend a lot of time there. It's nice to just spend a a hot summer day inside at the library checking out books and they always have toys and stuff. And one of the things that I've never actually used, but I know a lot of people appreciate at libraries is that they have video game collections. You can go to a library and borrow a PlayStation game, an Xbox game, a Nintendo game

without spending anything. Often times it's newish games that you can just get from a library. With this move to digital, that will no longer be possible. And that bumps me out for a few reasons. One because it's like that's a helpful way for lower income gamers to get new games, but also because anything that just takes away more inventory from libraries bumps me out cuz libraries are already kind of critically under funded and under supported throughout this country. So hey, if you're watching this and you're mad about this whole situation, I implore you, go check out your librarian and borrow some things because actually borrowing the more you borrow, even though it seems like you're getting away with something by like taking books for free or games for free, the more you borrow from a library, the more support that library gets. So it's like a win-win for everybody if you go and use your local library as much as possible. But anyway, I digress. It's very clear to a lot of people why this is a bad thing. And I really think that the one of the the real critical flaws that Sony made here and the

PlayStation made here is announcing this change that in 2028 they're going to pivot from get rid of all physical discs and just sell games digitally or in stores with a game key code that Grand Theft Auto 6 is this fall. The the flaw is not coupling that with some sort of upside for players. If they had said, you know what, we're going to do this, but here's how we are going to discount those games for players. Here's why you're going to benefit of from this. You're going to save more. Or here's our new program for allowing you to share games that you buy digitally or own games forever that you buy digitally refunds on games that you buy digitally. Anything coupled with that that that makes people feel like they're getting something out of this announcement instead of just losing a massive part of the gaming ecosystem, um, I think it have might have helped soften the blow. But no, that's where we're and They didn't do that and here we are. Um, PlayStation can no longer tweet anything without getting a massive

backlash. Uh, just a a kind of a a nonstop barrage of negative responses. To the point where I saw they tweeted yesterday a preview for this upcoming game. It looks really cool. Um, uh, what is it called? Blood of the Dawnbreaker? Rise of the Dawnbreaker? Whatever it's called. I'll I'll look this up. One take Shire over here. Like I said, um, the Blood of Dawnbreaker. Not the best name, but the game looks really cool. Anyway, they tweeted this preview and all of the responses were about the discs to the point where I wonder how many, uh, external third-party publishers or other developers are looking over at that and being like, "So, about this plan to post a blog on our game next week. Uh, could we maybe delay that, uh, a little while?" So, uh, this is having disruptive effects for everybody. Um, so let's see. What did they say? They They said they basically didn't give much of a reason. They just said, "As consumer preferences in the broader industry and broader entertainment industry continue to shift away from physical discs to digital, physical game disc production for all new games releasing on PlayStation consoles will

be discontinued starting January 2028." Blah, blah, blah, blah, blah. "This transition will enable us to align more closely with how most of our community prefers to access and play games today." I mean, everyone can read that and know that it's nonsense cuz like, uh, if you're taking away a choice from consumers that is not aligning anyone. Even people, uh, who who only play games digitally, who only buy games digitally, like this is not benefiting them in any way. It's It's an entirely, um, PlayStation benefit beneficial move only for PlayStation, only for the people involved. And I actually I want to get into that because I think that's an important part to understanding why this is happening is understanding why PlayStation is doing this and understanding why it is so beneficial for PlayStation. Um, by now you've probably seen stats online. There are a lot of stats about how game habits have changed. Um people are still buying physical games, but for some publishers, um it's a very small chunk of their population. For example, Capcom said in their most recent fiscal uh results that uh 93%

of their sales for um the most recent uh fiscal quarter, um third quarter of fiscal year '26, uh 93% was digital. Uh that is largely because um uh they're doing they're selling so many on PC where everything is digital. Not a lot of uh people are buying PC games on discs. I don't even know if they there most PC games are not sold on discs anymore. And by the way, I mean, I'm a PC gamer. So, for me, this is not really a relevant conversation, but I think a lot of people who do game on PC have found that um the PC ecosystem and Steam offer enough benefits to being digital and enough just kind of uh feeling of ownership. You feel like you own your game on Steam. Um you feel like you can obviously you can get refunds on Steam. There are enough Steam sales to make you feel like you're justified in buying games digitally. There is a little bit more of an upside. But, of course, I mean, that's there's been a downside to that, too. People have just gotten used to it. Um also, PC has emulation and PC is an open system. So, um the preservation

issue is is much less significant. PC games don't go obsolete the way that, I don't know, if like if the PlayStation 3 was digital only, you would have a hard time finding some PS3 games right now. Anyway, I digress. So, yeah. So, getting back to the numbers. So, um Capcom, 93% digital. Um Sony has kind of said that like 80, 85% of their game sales are digital. A lot of people are skeptical of those numbers um because they're uh uh they also include digital-only games. Um I think that there's some uh uh questions surrounding exactly if you like are looking at the latest AAA game like Saurus or whatever, um or not maybe that's not a great example. The the God of War or whatever. How many of those uh sales are actually physical? Uh One chart I saw, this is from the analyst Daniel Ahmad, shows that physical software for PlayStation is on this is all all of PlayStation all of PlayStation this is on a very sharp decline, but it's still significant. 70 million units sold last year. So, not nothing.

Not nothing. EA has also said they've shifted to more digital. Nintendo is kind of in its own little space where they are selling a significant number on physical still, but it's getting closer to closer to I believe they say that 54.6% Yeah, that's the number that I'm looking at for fiscal year 26. So, 54.6% of their software sales for last year were digital. And if you talk to by the way some of these kind of niche or boutique publishers that handle physical discs for digital games such as like I don't know Limited Run or like I am 8-bit. A lot of them will tell you that a lot of actually their business is Nintendo games. Also Japanese games Square Enix I think does some good business on physical especially with collector's editions. I think a lot of JRPG fans and fans of Japanese games tend to also take well to physical and collector's editions and stuff like that.

Um but here's the top line. I mean, I think that those numbers are kind of that's the part of the math problem here and part of the calculus and the spreadsheets that Sony is looking at is trying to figure out how many of their customers will actually be impacted by this and will actually care. And they've determined that there's a significant enough player base on digital that they don't need to keep printing discs. But the financial upside for them is really significant. And so, I wanted to get into the numbers a little bit cuz I think it's really helpful to understand why they are doing this and how beneficial it is for them financially to make this move. So, I want to read um an analysis. Um so, this is from Serkan Toto, who's an analyst with Kantan Games. And he wrote this great blog post about 6 years ago about that was kind of breaking down the um the uh percentages of a game sale that the publisher will actually keep versus what they have to pay to external parties like retail and

manufacturing fees and so on and so forth. Um keep in mind, this is just an estimate. There are a lot of variables here. There are kind of deals the publishers can make and there ups and downs in the market and and disc prices and things change all the time. So, this is very much an estimate, but it's still a helpful frame of reference when you're looking at this because you can see just how big a chunk Sony is now going to get that they were otherwise losing. So, let me break this down a little bit. I'm reading from this blog and I'll I'll post a link in the show notes. So, be sure to check it out if you want to see the numbers for yourself. So, um take a physical video game, $70 physical video game, traditional video game. When it's from a first-party publisher, when it's from Sony, Nintendo, or Microsoft, the breakdown looks like this. Cost is $70. Um retail store cut, so GameStop, Target, Walmart, whatever, they take about 30% of that. So, they take about $21. And then there's a manufacturing fee of about 350. And so, the publisher, Xbox, Sony, let's say Sony since that's what

we're talking about, PlayStation takes home $45.50 out of every $70 sale, okay? This is before taxes, other kind of uh variables, but let's just keep it simple. $45.50. Um third-party publisher, that's a different story. We'll get into that in a second. But, so that's a physical So, for a physical sale, for um a disc of the new God of War, Sony is taking home 4550. Digital sale, you know how much of that Sony takes home? $70. So, it is hugely beneficial. They are are are saving a significant amount. Um those margins are significantly higher when they sell digitally. So, they very much want you to buy their games digitally. And the reason that they're taking home $70 is because when Sony sells a game digitally, it is done on its own store. Stores uh digital stores have fees just like retail stores do, except that Sony operates its own store. So, it keeps its own fees. So, it keeps $70 of every sale of God of War sold on digital. Now, let's look at third-party publishers because this is the really

key part. When EA sells a new game, a new Madden game, uh it costs $70. Uh again, this is from according to Serkan Toto's um uh breakdown and and this is very much an estimate, but still it's helpful. $70. Uh 30% of that goes to the retail store, GameStop, uh $21. Then there is a licensing fee to the console maker, so to PlayStation if this is a PlayStation disc, of about 15%, maybe 10.50, something like that. Um manufacturing fees, 5%, call it 3.50, that's one that can really vary. Um shipping costs, production costs, all that other stuff. People have all sorts of deals in place. And so, the publisher winds up taking home $35. But, in that equation, remember, Sony, PlayStation, is taking 10.50 as their licensing fee for that. And EA is getting back $35. Now, if it's a digital sale, you take licensing fees and you take manufacturing fees out of the equation, and that retail fee, instead

of going to GameStop, it goes to PlayStation. So, a digital sale, if EA sells a new Madden to you on the PlayStation Store, it is $70 total. PlayStation takes 21 of those dollars, a 30% cut. Um sometimes, again, it can vary a little bit because some of these big publishers have deals in place with Sony and and Microsoft to take less cuts, but let's see just baseline, this is this kind of the the standard. 30%, $21. And EA takes home $49. So, EA is taking home more, and Sony is taking home more, and they've cut out the physical manufacturers and the store, GameStop, Walmart. And so, the game publishers are both making a lot more money off of this. But, the really important part is that instead of making just $10.50 in licensing fee for that disc, Sony and PlayStation, they are making $21 off of the store, off of that store cut, which is 30% as opposed to 15% In other words, Sony and PlayStation are extremely highly incentivized to move to

digital, not just for their games, where they are, of course, making more money, but also for all of the other games they are selling on their ecosystem. The important The The reason that these console makers are making consoles in the first place is not to sell you the hardware. In fact, PlayStation and Microsoft both take a loss on the hardware that they sell. They are not making money when they sell you a PlayStation. What they want you to do is get into the PlayStation ecosystem and be buying games on there, because that is how they make their money, and of course, subscription services and all that jazz. But, really, they want you to be buying games on there, and ideally, they want you to be buying games digitally on there. So, they are getting that $21, that 30% store cut, um off of each $70 game uh if you sell digitally. They're getting a lot less if you buy physically. Now, granted, with all of this, because Sony is not entirely amending retail. They're still going to sell boxes just with game

keys in them. Um that, I believe, I don't know exactly how the math is going to work there. They'll probably save on production costs, but um the retailer is still going to take a cut, and the PlayStation PlayStation is going to get less of a cut than they would digitally. So, we're not moving entirely to that model of Sony getting $21 for every single $70 game that is sold. We're not We're not there yet until these retailers all give up and say screw it, we don't want to sell all these keys in a box anymore. We're not there yet. So, there is still Sony is still not making the the most money it could possibly make. But, how many customers out there when this happens are actually going to go to the store and buy a game key in a box? That is not an appealing proposition for a ton of people. How many people are even going to bother? I think we're going to see the the numbers get skewed even further in favor of digital purchases on the store when that starts to happen. Um so, Sony, again, it is it is extremely helpful for them. It benefits them a great deal financially to be making this move. A lot of people

out there have talked about like um them getting control over now like sales and the used game market, and that's all part of the equation, too. There are a lot of factors here. But, the biggest one is that they are going to boost their margin significantly for every sale that they make. Um customers do not benefit from this. There is no cost savings being passed down to customers, at least that we can see. I mean, I think there's an argument out there, an economic argument out there that I've seen that um uh I guess holds some water, that the fact that game costs have stayed relatively flat over the last three decades um is itself a a form of cost savings. I'm not 100% sure I buy that, but I can see the logic. Um basically, what that argument would say is that uh games were um 60, 70, even more in the '90s, and that price has really stayed flat over over the last 30 years um despite inflation. And so, as a result, you are saving money when you buy a $70 game now as opposed to 30 years ago. And

I won't get into all of all of the the math there about uh wages and cost of living and how unaffordable everything is for a lot of people these days and and how that affects all of it. Um but, that is an argument. But, still, I mean, I think that um maybe there's a world where uh someone at PlayStation breaks down that they are saving some money or making some more money as a result of this move and therefore they are going to try to pass the costs down to customers in some way. I think that might might might smooth over some of this ongoing tension because I suspect this problem is not going to go away for them anytime soon. I don't think people are just going to just going to sit back and put up with it. I could be wrong. I don't know. Personally, I like I mentioned before, I'm mostly a PC gamer, so all of my games are pretty much digital. Anyway, it's funny on on the other shelf over here, you can't see it, but that shelf I have my game discs like a bunch of game

discs in a row and it just ends at PS4 cuz I don't think I have a single physical game from the PS5 Xbox Series era. So so for me it's not a huge doesn't have a huge impact on me personally, but it does I I do think it's it's got a massive impact on all the things I mentioned preservation and and use games and people's wallets and most importantly libraries. So yeah, I mean that's that's some of the math if you want to help if you want to understand a little bit about why this is happening. I am I will certainly be following it further and and keeping an eye out. I'm curious to see what happens next if Sony just keeps on tweeting through it and hopes that it dies down. I guess we'll see. But one note I'll end on is go and support library and go get some free books and and games that you can borrow often times borrow for lengthy periods of time. And in fact, if you're digital, and maybe you know, maybe come to think of it. I mean so so libraries do have kind of a digital and

ebook borrowing program called Libby and I mean I think there are other apps too, but Libby is the big one where you can sign up and and download a book and borrow it from the library digitally. I wonder if libraries will work with the console manufacturers to do something similar for digital games, which again, if this had been part of the whole announcement, maybe maybe the messaging would look a little different, maybe the reactions would like look a little bit different. But yeah, I'll see you guys next time and hey, go support your local library.