As the ludosphere staggers from the unprecedented weight of layoffs from Microsoft's Xbox division this week, we focus on brighter futures: Atari Europe's first president, Andreas Deptolla, tells us about responsible growth and studio management in the region.

Next, James Batchelor talks to analysts about the impact of Sony's decision to cease physical game releases in 2028, making the comparison to music and movies, two industries that have always retained a physical element in the face of digitisation.

Then hot takes and links for fun. Stay safe out there.

When Andreas Deptolla was appointed the first president of Atari Europe this month, the move formalised the company's direction in recent years. Listed on Euronext Paris but historically US-centric in its operations, Atari is now building a European organisation with genuine weight: a new legal entity in Munster, three studios under Deptolla's direct oversight following the August 2025 acquisition of Thunderful Group, and a leadership model designed to scale. 

Deptolla, who joined Atari in 2023 as CTO, is pragmatic about the promotion.

"A lot of people are wearing a lot of different hats," he tells Knowledge. "This was not only about technology. I was involved in post-merger integration and many other things. We got to an inflection point and said, 'For the coming years, what do we need to change from an organisation perspective to make sure we're set up for success?" 

The answer was a regional leadership structure. While Ethan Zoubek controls the North American side of the operation as head of Atari Inc, with US studios reporting to him, Deptolla's European remit covers Coatsink in the UK and Swedish studios Stormteller Games and Early Morning Studio – all acquired via Thunderful – along with central services including IT and the gaming database platform MobyGames. He does retain some technology oversight. "We built a system over the last three years. The skillsets, the people, were pretty complementary. It also gave a lot of people career opportunities to take their career to the next level."

Munster funster 

The European base is Munster, in North Rhine-Westphalia. Deptolla spent a decade in Boulder, Colorado, alongside Atari CEO Wade Rosen before returning to Germany.

"Munster brings us a really rich talent pool," Deptolla says. "We have a university here with more than 40,000 students and an active programme with interns, whether in design or development."

"Germany is also doing a lot for the gaming industry – tax credits, incentives, and so on."

While Munster provides Deptolla with the ideal location for managing Atari Europe, the recent Thunderful acquisition brought three European studios with markedly different profiles. Early Morning Studio, based in Stockholm, is a mobile free-to-play developer known for the Vampire's Fall franchise. Coatsink, headquartered in Gateshead, has a decade-plus record across multi-platform development and co-development. Finally, Stormteller Games makes premium titles, attracting critical acclaim with 2025's Lost In Random: The Eternal Die.

Each is to stay structurally distinct, with Atari's publishing labels matched to product.

"We have the Atari Classic brand, Infogrames as a European label, and Thunderful has a pretty strong name. We'll always try to pair the right IP with the right label."

Stability is the explicit priority for the next 12 months. The Thunderful studios had a turbulent few years before the Atari deal closed, with restructuring and layoffs.

"With all of the changes on the Thunderful side, this was a difficult last two or three years for the team. How do you bring stability? How do you bring systems to the teams so they can focus on what they're best at? On the Atari side, we can absorb central functions – finance, legal, HR – and allow the studios to focus on their creativity."

On M&A, Deptolla is focused on consolidation: headcount has grown from around 20 full-time employees three years ago to more than 300 today.

"We need to be really thoughtful about making sure we can digest and integrate what we've acquired," he says.

Resurrecting legacy IP in Europe 

What binds the overall strategy is an insistence on IP ownership. Deptolla is frank that Atari's appetite for conventional third-party publishing has narrowed. "We would rather own the IP, or have agreements in place where we can work on it really, really long term," he says.

"We can then utilise our full network on the publishing and licensing side: for example, what other things can we do with a game, whether it's a movie or otherwise? Long-term thinking is one of our core values."

The studios are positioned accordingly: "We always seek the industry niches in which we can be world class and unique. With the right IP, each of the studios is uniquely positioned to excel."

David Lowey, Atari's senior director of communications, adds context on what that means for European audiences. Much of Atari's recently revived legacy IP – such as Asteroids, Centipede and Missile Command – carries global rather than regional resonance. The new European footprint, however, is expected to shift focus a little in terms of exploiting properties.

"There are IPs in our portfolio and IPs in Europe that the European playerbase will respond to," Lowey says. "Having feet on the ground, closer to what's going on culturally, we'll probably see some games coming out of Atari that are very familiar to European audiences.

"That's also good for our platform partners, who have global audiences and need to bring out titles with regional appeal."

The game business is still reeling from PlayStation's decision to end all disc production from 2028. The deluge of editorials, social media posts and memes decrying the decision all ask the same question: what impact will the death of physical media have on the industry? 

Perry Graham, Midia Research's head of data, recognises Sony is betting on most disc buyers migrating towards digital, but warns that "fully abandoning physical games could be a mistake for Sony and the industry more broadly [as] losing physical sales may actually shrink the pie." 

"This might happen for a number of reasons," he tells Knowledge. "Some gamers only buy physical. Fewer games in stores means reduced retail visibility, and the lack of second-hand games limits discovery. Gift giving will become harder, collectors may spend less, and there’s a potential negative impact on games’ cultural heft." 

Karol Severin – founder of Midia Research, now a freelance analyst – counters that while the death of PlayStation discs will "piss off some gamers", it's unlikely to have an effect "critical enough for that to matter in the sum of things." 

He adds that this decision has clearly been "in the pipeline for a long time," likely paving the way for a new digital-only console generation, and will "undoubtedly grow Sony's margins." The platform holder will no longer need to share revenue with partners in packaging, retail, and shipping, and it retains full control over pricing and distribution via the PlayStation Store. 

"We all know the industry has struggled with growth for the last couple of years," Severin continues. "Whenever revenue growth slows, the focus shifts to chasing profitability. And in times of a looming oil crisis and potential recession, all of the logistical stuff that requires physical shipments is only going to get more expensive. We already saw disruption during COVID and the semiconductor crisis." 

The dominance of digital purchases, seemingly the driving factor behind Sony's decision, is certainly not unique to games. Midia data shows that physical sales only account for one-eighth of all recorded music sales, compared to one-fifth of PS5 game sales. Similarly, most consumers access films and TV shows today through streaming services. 

So why haven't other entertainment industries become wholly digital businesses?

Severin cites multiple reasons, starting with the importance of those revenue streams: "I would imagine [record labels] get more out of a CD sale than a stream on Spotify. [Physical media] has also become almost like a collectible in music. I remember a Midia study that showed double-digit penetrations of people who buy vinyl every month – but two-thirds of them don't own a record player. They're essentially buying them as mementos." 

Graham backs this up with another study: Midia's Research Consumer Survey Q3 2025 showed that one-third of US consumers who purchased physical music said they did so "to own a physical representation of the music I enjoy." The only motivations that topped this were "to build or complete a personal collection" and "to listen to them." 

"It’s not that consumers are necessarily moving back from digital to physical wholesale," Graham says. "Rather that there are specific use cases and consumer motivations which physical media addresses well." 

Both analysts suggest that physical games could become something of a status symbol in the future, with collector's editions, for example, indicating how serious a player is about the medium – just as DSLR cameras denote a serious photographer in the age of camera-bearing smartphones.  

Yet while younger generations are investing in vinyl, cassettes, DVDs, etc, neither Graham nor Severin is confident that this would be recreated in the videogame space. 

Ultimately, can an entertainment industry thrive without physical media? 

Severin believes it can: "There are a thousand factors that affect the answer to that question, and I don't think this is even one of the top hundred. Gamers will care more about experience, entertainment, and value – and I don't think any of this is really impacted by this move.  

"For all the reactions we've seen on social media, I think the silent majority couldn't care less. It was the same with music. People said digital would kill the medium and ownership, but the truth is people stream because they like convenience and value – all music for $9.99 per month, as opposed to one $15 CD." 

Graham points to the many examples of successful companies and parts of various entertainment industries that are effectively digital-only. In games alone, the wholly digital mobile and PC markets account for more than 75 per cent of the total software market, according to Midia's global forecasts. 

He notes that the biggest impact of the decline of physical media in games will be on developers and publishers, whose negotiating power will be reduced if the only distribution channel is a platform holder's store, as opposed to traditional retail or the alternative marketplaces you find on PC. 

"Will they still make money through [platform holders]? Absolutely. Will they need to adapt a bit? Absolutely. But I don't think it kills the business model in any way."

SOCIAL COMMENTARY

Highlights from industry chat channels

What was it about 1666: Amsterdam that made creative director Patrice Désilets put himself through years of legal wrangles and associated difficulties in order to realise his dream? "It's a really good question," he laughs. "First, I knew that we had something. Then, when Ubisoft eventually kicked me out of the office, my partner and I went to have a sandwich. When we received the bill, it was $16.66. I was like: 'OK, let's continue'." 

The coincidences didn't end there. Further instances of serendipity helped to reassure Désilets that the 1666: Amsterdam project was worth pursuing, and in Edge 426, out now, he and his colleagues at Montreal's Panache Digital explain how they've pushed towards the finish line on an idea that first stirred into life towards the end of the PS3/360 era.  

In other features, Hideki Kamiya's Collected Works guides us through his celebrated CV, from Resident Evil to the forthcoming Okami sequel, while in The Making Of… we talk to Blue Manchu about the creation of Void Bastards, and in Time Extend we rewind to the GameCube launch for another run at Super Monkey Ball. Dan Marshall's Size Five Games is the focus of our Studio Profile slot, and elsewhere we check in with Fumito Ueda to discover some of the inspiration behind the forthcoming Gen Atlas.  

As per tradition, our post-Summer Game Fest edition is a preview special, featuring 100 forthcoming games to watch, while new releases such as Star Fox, Rhythm Paradise Groove, Beastro and Gothic 1 Remake arrive for review. 

Edge 426 is in UK shops now and available to buy online here.

We'll be back next week. In the meantime, don't forget to share your feedback with us by email ([email protected]), and follow us via Bluesky and LinkedIn.