- Alan Wake II will only have a digital release to keep costs down.
- This is a trend that will only accelerate, according to Circana analyst Mat Piscatella.
- The phase-out of physical discs could be realized by 2028.
Since the very beginning of gaming, you had to purchase physical discs to play a game. This all changed in the last decade, where you can buy and download games right on your console. Even Xbox and Playstation have released versions of their latest consoles without any disc drive. Some game publishers are moving away from releasing games on disc, something that could only continue to accelerate.
According to video game industry analyst Mat Piscatella of Circana, it will be the norm for companies to ditch physical video game sales, by 2028. By 2028 we expect a new generation of consoles to be released. This comes on the news that the upcoming Alan Wake II from Epic Games will not have a disc version, to keep costs low and keep the game under $69.99. Mat spoke about this topic on Twitter.
Digital only AAA releases are here. Over the next 2 years this trend will accelerate, and by 2028 or so I think it'll be the norm for most Xbox and PS releases. Nintendo likely won't move as fast, but then again it's Nintendo and they're always full of surprises.
— Mat Piscatella (@MatPiscatella) June 10, 2023
The reality is some games are simply too big to be kept on a disc. Nowadays many games do not even have the game installed on the disc and simply download it from a server. This is the case with the most recent Call of Duty games. Modern Warfare 2 only has 72 MB of data on the disk, for a 100 GB game. Newer games that do contain the game on disc, like Cyberpunk 2077 often require 2 discs to download everything.
One big issue is that video game development is expensive. New games have budgets that go into the tens if not hundreds of millions of dollars. A reason for the price of most current-generation games to increase from $59.99 to $69.99. So if you’re a publisher, why not cut costs some more? For example, Ubisoft collects a 55% margin on physical releases, and 70% on digital ones.
So is this the end of physical games? They are already dead. In 2022, 90% of video games were sold digitally. It is financial sense for video game publishers to want to have more digital sales. it is also a convenience for consumers to not have a big library of physical discs. Gone are the days of the midnight physical releases, when people would wait hours for a new game, but those memories can always be cherished.
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