PlayStation's latest corporate report shows that physical game sales among PS5 and PS4 users now account for a miniscule portion of the business. Digital games have vastly overshadowed the contribution of disc-based PlayStation titles to Sony's bottom line.
Physical games used to comprise a substantial chunk of the PlayStation business, especially during the PS4 era when it wasn't uncommon for a tentpole exclusive to ship millions of boxed copies. Before the PS5 launched in late 2020, physical software represented around 6 percent of PlayStation's revenue, which fell to 5 percent the next year, and then to 4 percent in FY2022. Now, FY2024 data reveals that physical game sales have declined on PS4 and PS5 to yet another record low.
New Report Is Seriously Bad News for Physical Game Releases
A new report seems to confirm what many gamers are worried about: the writing is on the wall for physical game releases in the future.
PS5 and PS4 Physical Games Comprised Merely 3 Percent of PlayStation Revenue
According to Sony's newly-published FY2024 corporate report, physical games accounted for 3 percent ($945 million) of PlayStation's revenue in the prior fiscal year, whereas digital software made up 20 percent. It's worth noting that Sony's definition of physical software is narrower than it sounds, as it only covers first-party disc sales, royalties from third-party publishers, and bundled games. Meanwhile, the digital software category counts all first-party and third-party full games purchased through the PlayStation Store. Even so, the gap is undeniable, with digital games bringing in over six times the revenue that disc-based titles do.
As one would expect, the real money for PlayStation is in add-on content from games. Microtransactions, in-game currency, cosmetic skins, DLC packs, and expansion content accounted for a whopping 29 percent of PlayStation's total revenue, making it the single largest contributor. Hardware followed at 24 percent, buoyed by strong PS5 sales despite price hikes in most major regions this year. Network services, including PS Plus subscriptions, trailed digital software at 14 percent, while other PlayStation-related businesses added another 10 percent to FY24 revenue.
This is grim news, especially for fans of physical games, but it doesn't come as a surprise given that a large percentage of console players are shifting toward digital libraries, subscription models, and live-service ecosystems. Trends like these are evident on other platforms too, with Microsoft being quite adamant in its mission to make digital the prevailing format for Xbox games, and Nintendo taking heat over the Switch 2's Game-Key Cards. Interestingly, a recent rumor claimed that the PS6 will launch with a detachable disc drive, and if true, it could signal that despite the single-digit contribution to revenue, Sony still believes in physical games.
