This article was originally published on July 10, 2026 - read the full issue

By James Batchelor

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."

This article was originally published on July 10, 2026 - read the full issue