Naruto: Ultimate Ninja Developer Claims Disc-Based Games Are Doomed to Fail and Thinks End of Physical Format Will Benefit the Industry

For decades, physical media was the main way to enjoy videogames, however, the accelerating shift toward digital storefronts has reduced disc and cartridge purchases to a distinct minority. CyberConnect2 Chief Executive Officer recently spoke about this topic and his comments sparked controversy

The discussion surrounding the phasing out of physical media intensified following PlayStation’s announcement to cease producing first- and third-party disc-based games starting in January 2028.

While these sweeping measures have triggered significant consumer backlash and speculation that competitors like Microsoft and Nintendo may follow suit, developers and studios have a different opinion.

CyberConnect2 CEO Supports the End of the Physical Media

Weighing in on the controversy, Hiroshi Matsuyama, head of CyberConnect2, renowned for anime adaptations such as Naruto: Ultimate Ninja, Dragon Ball Z: Kakarot, and Demon Slayer: Kimetsu no Yaiba – The Hinokami Chronicles, addressed the ongoing decline of physical media in a video series aimed at mentoring industry newcomers.

Matsuyama characterized the abandonment of physical releases as a positive evolution for the market, explaining that digital distribution yields substantially higher profit margins by eliminating the manufacturing cost of purchasing discs and cartridges directly from console manufacturers like Sony and Nintendo.

Highlighting industry precedents such as Capcom and Square Enix, where digital sales routinely exceed 90% of total revenue, Matsuyama argued that maintaining costly physical production lines for fewer than 10% of active consumers is economically unviable.

“Culturally, physical copies were a normal thing, so I understand why some people might dislike to see them gone. However, nowadays, they can’t win in terms of convenience,” he said.

Hiroshi Matsuyama Thinks Physical Discs Are “Doomed to Fail”

“If you want to release physical games even if it means that salaries will be reduced, then sure, I can make it happen – but I don’t think there’s anyone willing to do that,” Matsuyama said, noting that developers must think about profit and encouraging sales.

While Hiroshi Matsuyama isn’t entirely pessimistic about the medium’s future, he believes the physical format will survive primarily as collector-oriented packages containing download codes, extra goodies, or exclusive merchandise. In his view, these special editions are destined to carve out a dedicated niche for hardcore fans.

Even so, the CyberConnect2 director warns that traditional discs are ultimately “doomed to fail.” He points out that modern blockbusters such as the upcoming Grand Theft Auto VI simply outpace the storage capacity of a DVD or Blu-Ray.

“It’s a day and age where a single game surpasses the size 160GB or 200GB. GTA VI is too big to fit on a physical disc, and BluRay discs are capped at 80GB, so how many CDs would you actually need for that? I don’t think delivering something so inconvenient to customers is a good thing,” he said.

Matsuyama shares the disappointment felt by creators and players alike over the fading era of physical media, admitting he shares that nostalgia. Yet, he stresses the necessity of facing the future head-on, expressing confidence that the industry’s paradigm shift is a net positive.

“I think it’s important to make that shift. As for what kind of impact it will make, there will be nothing but positive things, profitability will rise much faster, and developers will get more bonuses,” he concluded.

Do you agree with the CEO of CyberConnect2? Share your thoughts in the comments below.