I’m generally a person who appreciates physical media. I collect vinyl records, buy print books, and like to watch 4K Blu-ray movies. But for a variety of reasons, I switched entirely to buying digital games on each platform as soon as the option became available. Now that Sony and Microsoft have revealed their next-generation consoles in full, a lot more people may well choose to do the same.
To recap, yesterday Sony announced the pricing for its upcoming PlayStation 5 — both the regular model and the disc-less Digital Edition. The standard PS5 is $499.99 and the otherwise identical Digital Edition is $399.99, saving you a full $100 if you swear off physical games for good.
Microsoft, meanwhile, has gone even further to incentivize digital game purchases and Game Pass subscriptions. The Series X will go head-to-head with the standard PS5, with both consoles offering disc drives and 4K output for $499. The Series S will play games at lower resolutions and doesn’t have a disc drive, but it’s much smaller and is priced at an impressively low $299.
The message is clear: physical games are now a high-end, optional part of the console gaming experience. A luxury. And both Sony and Microsoft are willing to subsidize the move to digital. There’s no way the disc drive alone explains the $100 price delta between both PS5 variants, for example — but Sony wants to be your only retailer, and it’ll expect to make the money back through Digital Edition customers buying games directly. Microsoft, meanwhile, is surely selling the Series S at well below cost, but stands to benefit from boosted Game Pass revenue and digital game sales.
If you feel strongly about sticking with physical games, this isn’t great news. People living in areas with poor broadband service or data caps face the prospect of paying for a more expensive console, as do players who often offset the cost of a pricey hobby by buying and selling used games. That market is also likely to be significantly squeezed as more people move to digital-only consoles, which won’t bode well for retailers like GameStop — though they do have the ability to be more flexible on pricing than the platform owners. Digital games are also often more expensive than their retail equivalents when not on sale, but you should expect next-gen games to be pricey wherever you buy them for the near future.
Despite the potential issues, this shift has felt inevitable for a long time. With the PS4 and Xbox One, games don’t even run off the discs they were printed on — you have to install them fully to the consoles’ hard drives because Blu-ray’s access speeds are so much slower. That removed a key advantage of physical gaming on consoles like the Xbox 360, where storage space was at a premium for many users. Even before then, the PS3’s move to Blu-ray discs often meant mandatory partial installations to reduce load times. It was genuinely controversial when Devil May Cry 4 forced you to install 5GB of data to the hard drive, believe it or not.
As that generation played out and larger hard drives became more commonplace, Sony and Microsoft started pushing full-game downloads as an alternative to traditional retail. Sony had already started making PSP games available digitally as standard with 2009’s PSP Go, a smaller digital-only PSP with a sliding design and a higher price point than the regular model. That same year, Microsoft announced its Xbox Games on Demand service, which marked the first time you could download full retail Xbox 360 games, though at first only older titles were available. Sony then launched a program in 2012 called PSN Day 1 Digital, where new games came to the PlayStation Store day-and-date.
By the time the PS4 and Xbox One came around, both companies sold all new games digitally as well as at retail. Microsoft even tried to make digital ownership a core component of its platform, with the ability to share and resell downloaded games coming at the expense of offline play and used game support. Of course, the company eventually reversed course after a huge backlash. But we did eventually see a disc-less Xbox One S hit the market last year, and I wonder how Microsoft’s original vision for the Xbox One would be received today.
Maybe not much better — physical games won’t go away completely, of course. But things are trending in that direction. Even Nintendo announced yesterday that more than 50 percent of its Switch game sales were digital in the first half of this year, partly due to the COVID-19 pandemic. The figure was 74 percent in the April-June quarter for Sony, which was already at 53 percent a year ago. These numbers are going to fall as customers return to brick-and-mortar stores, but once people get used to digital games, they may be more willing to get on board with the experience.
The core advantage of digital from a user perspective is the convenience. You don’t have to muddle around with ejecting and inserting discs. Your games don’t take up shelf space, and these days they don’t take up any more hard drive space, either. You can shop at stores from multiple regions, and everything appears in the same library. Once you’re used to it, dealing with spinning discs feels archaic.
EA said that 52% of its console full game unit sales in the past 12 months were via digital download— Daniel Ahmad (@ZhugeEX) July 30, 2020
For reference, Take Two says its ratio was 55% for FY2020
Sony said that 51% of all games sold on PS4 in FY2020 were digital
In other words. We enter next gen with digital >50%
Some people will still want physical games for the ability to sell them later on, or for quite the opposite reason: to maintain a tangible collection. Preservation isn’t as much of a factor as it once was in this age of live servers and day-one patches — a lot of PS4 discs are going to be pretty useless in decades to come. That doesn’t mean there’s no appeal to building up a collection, though, and companies like Limited Run Games play to this market with special-edition physical releases for titles that otherwise wouldn’t receive one.
But that’s very much a niche — the vinyl of video games, if you will. (And yes, Limited Run also sells video game vinyl.) What’s changed is that both Sony and Microsoft are betting that there are now enough people out there willing to stop buying physical games altogether. Both companies are also making sure that their digital-only buyers will feel like they’ve already built up a collection from the start. There’s Xbox Game Pass, of course, which does a great job of integrating into your own library, and Sony just announced a PlayStation Plus Collection for PS5 featuring many of the PS4’s best titles.
Buying digital is worth it if you value the experience, and it’s also very much in Microsoft and Sony’s interests that you do so. That makes a product like the PlayStation 5 Digital Edition an obvious win-win for people that are already used to digital — a better experience at a lower price. (And a more attractive design.) The key question is how many people who buy physical today will be willing to make the trade-off next generation.