Highlights
- Publishers keep up to 54% more revenue when a game sells digitally instead of on disc, according to an analysis by industry consultant Dr. Serkan Toto.
- Sony announced on July 1 that physical disc production for all new PlayStation games will end in January 2028.
- Going digital-only also cuts off the pre-owned market, giving platform holders full control over pricing while consumers lose resale and lending options.
The era of physical game collections is ending, and the reason is not just player convenience. According to an analysis by Dr. Serkan Toto, CEO of Tokyo-based consultancy Kantan Games Inc. published in 2020, publishers keep up to 54% more revenue when a customer buys a game digitally rather than on disc. That gap is a major force behind the industry's push toward an all-digital future.
The push became policy on July 1, when Sony announced that physical disc production for all new games releasing on PlayStation consoles will end in January 2028. After that date, new titles will be sold only in digital formats, through the PlayStation Store and at retailers. Games released on disc before the cutoff are unaffected. Investors read the move the same way the analysts did: Sony's stock rose on the Tokyo Stock Exchange the day of the announcement, even as the broader Nikkei fell.
Sony framed the decision as a response to consumer trends, saying the preference for digital media "significantly outpaces physical discs." Analysts point to the bottom line as well. Publishers are looking for ways to offset AAA development budgets that routinely run into hundreds of millions of dollars, and every disc sold at a brick-and-mortar store has to feed a chain of manufacturing, shipping, and retail partners before the publisher sees its share.
How the $70 splits, physical vs. digital
Toto's breakdown shows why the math favors digital, especially for platform holders. For first-party studios, such as Sony publishing a PlayStation game, the digital advantage is total. Because these companies own the storefronts, they pay no commission or licensing fees. On a $70 digital sale, a first-party publisher keeps the full $70 in gross revenue.
When the same first-party game sells as a disc, roughly 35% of the revenue goes to production, shipping, and retail. After about $21 to the retailer and roughly $3.50 to manufacturing and overhead, the publisher's share falls to around $45.50, about 54% less than the digital equivalent.
Pexels
Third-party publishers face different math, but it still favors digital. When a third-party studio sells a physical disc, around 50% of the revenue is lost to retail expenses, disc pressing, packaging, international shipping, and licensing fees paid to platform holders such as Sony, Nintendo, and Microsoft. That leaves the publisher with roughly $35 per unit. Sold digitally, the same game loses only the standard 30% storefront cut, about $21, leaving the publisher with roughly $49 from a $70 sale.
"From a purely financial perspective, Sony, Microsoft, and Nintendo are more incentivized to shun physical media on both an absolute and relative basis," Toto said. He cautions that his analysis is "not an exact science": sales taxes, regional production costs, platform-specific fees, and quirks like retail boxes containing only download codes mean the exact figures vary by market.
Killing the pre-owned market and controlling prices
For players, the transition threatens to make gaming less affordable. A single disc can be traded, sold, or borrowed dozens of times, but the publisher earns money only on the first transaction. Removing discs closes that loop entirely, forcing consumers to buy a full-priced license from an official digital store. The ownership question has drawn criticism from inside the industry too, with Hideo Kojima warning that a server-reliant digital future strips players of permanent ownership of their games.
In a digital-only ecosystem, the platform holder also dictates what a game costs, when it goes on sale, and how long prices hold. The baseline is already moving. Grand Theft Auto 6, which launches November 19 as a digital-only release with a download code in its "physical" box, is priced at $79.99 for the standard edition and $99.99 for the Ultimate Edition, confirming $80 as the new AAA ceiling.
The direction of consumer spending backs the shift. US players spent $1.5 billion on new physical games in 2025, the lowest figure since Circana began tracking the metric in 1995, according to the firm's Mat Piscatella. On PlayStation, digital downloads made up 78% of full-game purchases in Sony's fiscal year ending March 2026. Whether the all-digital model grows the market or gradually prices out the players who built it is the question the next console generation will answer.
