Digital-Only Could Boost Game Profits by Up to 54%, Analyst Claims

A gaming analyst has mapped out how the financial picture might change for major platform holders like PlayStation and Xbox in a disc-free era, claiming the move away from physical media could boost profits by up to 54%. The backdrop is familiar: making game consoles and producing game inventory has grown more costly, and the biggest names are actively hunting for ways to protect—or expand—profit margins. One of the most talked-about recent signals came when PlayStation announced it would stop producing new game discs starting in January 2028.

Key takeaways

• A consultant and analyst argues that eliminating game discs could raise profits by as much as 54%.
• PlayStation’s plan to stop printing new discs begins in January 2028, sparking expectations that Xbox may follow.
• Digital sales can leave publishers with more revenue per unit because third-party economics differ from physical production and retail.
• First-party publishers keep the full price of a digital sale, while third parties face additional fees from storefronts.
• Analysts stress that the comparison is incomplete without taxes, regional costs, and platform-specific policies.

Why PlayStation’s disc decision caused a backlash

PlayStation’s announcement hit hard with many players, especially those expecting Xbox to eventually abandon physical releases as well. One early defense of the switch was the idea that over 80% of players already purchase digital games, implying the industry was simply catching up to current buying habits. Later, however, analysts pushed back on that framing, saying the “digital share” is inflated because digital storefronts include a wider variety of content—like downloadable add-ons—compared to what physical editions typically offer. Their position is that the disc phase-out is being made primarily to improve profit outcomes.

Sony’s decision to end physical PlayStation game production after January 2028 does include an important caveat, giving the company some flexibility as it transitions.

Digital-first economics: where the money shifts

Digital Vs. Physical First-Party Game Sale Profit

First-Party Physical Game

Retail/Digital store cut ~30%

Dr. Serkan Toto, CEO of KantanGames Inc., laid out a breakdown of where money goes when games are sold on disc versus through digital stores. For a first-party title, he estimates that roughly 35% of earnings from a physical disc sale gets absorbed by production, shipping, and retail costs. For third-party studios, the share can be higher—around 50%—because disc manufacturing is only part of the expense; those teams also pay licensing fees to platform holders such as Sony, Xbox, and Nintendo.

In the digital model, Dr. Toto says third-party publishers usually face a different structure: the primary extra cost is a 30% storefront cut, which works out to about $21 out of a $70 game. After that, the remainder is roughly $49 in revenue for the publisher from that $70 purchase. He also emphasizes that first-party studios do not pay those same fees and keep the full $70 from each digital sale.

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Dr. Toto argues that this creates a strong incentive: “That means from a purely financial perspective, Sony, Microsoft, and Nintendo are more incentivized to shun physical media on both an absolute and relative basis.” Another analyst, Piers Harding-Rolls, adds that digital-only sales could open long-term opportunities for developers and publishers. The central takeaway from the numbers is straightforward: dropping discs could increase the share of money publishers keep. Still, the industry question remains whether chasing profit alone will actually support growth—or whether it could unintentionally hurt the market in the near term.

With GTA 6 already pushing pricing to $80, the industry could see more major releases moving to that higher tier instead of clinging to the traditional $70 baseline. If that happens, the total profit publishers earn from digital transactions might rise beyond the example figures. Even so, Dr. Toto notes that the conversation can be endless, and several practical variables aren’t included in the simplified comparisons.

For instance, the profit calculations are made before taxes. The analysis also doesn’t fully account for deeper economic differences between physical and digital across markets, and it leaves out additional details such as the fact that retail boxes may include download vouchers. There’s also the possibility of extra production expenses that vary by country, which publishers and sellers typically don’t publicly disclose. On top of that, each platform can introduce its own internal rules and fees, which can shift results further. As Dr. Toto puts it, the work is “not an exact science.”

The real-world costs—and the player impact

To be fair, running, maintaining, and expanding major platform ecosystems like PlayStation, Xbox, and Nintendo does cost more in today’s economy. There’s also an ongoing RAM and storage shortage, which has raised broader worries about the future of gaming hardware. Still, critics argue that large corporations such as Sony and Microsoft may be concentrating on earning more from current customers instead of cutting costs or improving production efficiency. As that happens, many players feel games are becoming less affordable year over year. Whether that downward affordability trend improves later remains uncertain.