physical sales stratagem 2025 will hit a new low, continuing the unfortunate trend we've seen in the industry over the past few years. While many fans have objected to the digital-only release and its misleading labeling as a “physical” edition, there seems to be a disconnect between this trend and the wider market. While overall video game sales are doing well, the same cannot be said for hard copies.
The gaming sector has been moving toward a digital-only, or at least digital-first, future for some time. In 2025, the discless Xbox Series SS will significantly outpace the Xbox Series X, accounting for 75% of all platform sales. Services like Xbox Game Pass and PlayStation Plus have made it easy to access vast libraries of digital games, pushing us further away from physical alternatives. Despite this, there are still fans clamoring for hard copies, but the numbers show that these gamers are in the minority.
It looks like Xbox may be phasing out physical gaming entirely.
Fans have noticed several potential signs of trouble that may suggest Xbox is starting to move away from physical copies in favor of digital-only games.
Despite the slowing rate of decline, actual game sales hit their lowest point in 2025.
Therefore, new physical video game spending in the U.S. in 2025 will be down 11% compared to 2024. This is the lowest decline since 2021 (-8%) and much better than the -28% recorded in 2024. But spending on new physical video games will also reach $1.5 billion in 2025, the lowest since 1995. — Matt Piscatella (@matpiscatella.bsky.social) 2026-03-02T23:39:52.024Z
Gaming industry analyst Mat Piscatella responded to a report on Gen Z's embrace of physical media, noting that spending on new physical game copies in the U.S. was just $1.5 billion in 2025. This is the lowest reading since analysts began tracking it in 1995. It's also the 17th straight year of decline, as U.S. physical game sales have been steadily declining since 2008, when they peaked at $11.6 billion. But interestingly, the 11% decline between 2024 and 2025 marks the lowest decline since 2021 and a marked improvement over the 28% decline in 2024.
Piscatella suggests that the slowing decline has more to do with physical game sales hitting bottom rather than signaling an upward trend. He also noted that the launch of the Nintendo Switch 2 will likely boost sales, and while Gen Z's preference for physical media may have an impact, it doesn't represent a “dramatic change.” It's also worth noting that while Piscatella only spoke about U.S. sales figures, this is part of a global movement. According to the 2025 report, as of 2022, 70% of German game purchases will be digital and almost 90% of UK game sales will be digital. Physical games aren't completely gone, but they are a much smaller part of the market than they used to be.
This move is not particularly surprising, as similar changes have occurred in film and music. This is understandable, considering how much more accessible digital games have become. Players can purchase and play digital games without leaving home or waiting for a package to be delivered, and switching between titles is more convenient when there are no discs or cartridges to take out and replace. Even the Switch 2's controversial game key cards offer some advantages. Some developers note how they help with preservation by lasting longer than actual physical media, while others point out how they enable premium experiences on consoles.
Nonetheless, physical games have their own advantages, and ownership issues are one of the most frequently mentioned. Fans don't technically own the digital games because they have purchased a license to play the title, which theoretically the company can cancel. Physical versions also provide resale opportunities and often do not require an Internet connection. Even if a download is required on disk, it will usually (but not always) have a smaller file size than that required for the digital-only version. Regardless of the pros and cons of both sides, it's clear that digital gaming will remain the standard in the future, even if a small portion of the audience still prefers tangible games.
