Will Video Game Stores Disappear? Analysts Paint Grim Future for Retailers as Physical Media Fades Away

The decline of physical media is poised to deliver more than a crushing blow to collectors’ shelves, it also threatens the very survival of video game retailers. Beginning in January 2028, PlayStation will cease distributing physical discs and instead offer only boxed download codes, a shift that will strip away the last remaining incentive for consumers to visit stores.

Industry analysts agree that the end of disc-based games will severely undermine the business model of specialized retailers, forcing them to urgently explore new strategies to remain viable in an industry increasingly committed to all-digital distribution.

End of Physical Media Could Spell End of Videogame Stores

The obsolescence of physical formats may well prove to be another nail in the coffin for traditional game stores, which have already been struggling for years.

Rhys Elliot, an analyst at Alinea Analytics, warns that PlayStation’s decision will place considerable strain on many game retailers. While he suggests that the second-hand market could offer a partial lifeline, he remains skeptical about its ability to sustain stores in a sector that continues its long-term decline.

Drawing on his prior experience working at GAME and his familiarity with chains like CEX, Elliot argues that foot traffic and sales will drop sharply, as there is little reason for customers to visit a physical outlet merely to purchase a download code. This vulnerability extends beyond independent shops to major players such as GameStop, Gameplanet, and even Amazon.

“A code-in-box has none of the things that made physical worth choosing: no resale value, no lending, less collectability,” Elliot told Eurogamer in a recent interview.

The shift has drawn widespread criticism not only from players but also from developers and other industry voices, many of whom have spoken out against the erosion of physical ownership. Some retailers have joined the chorus, urging consumers to defend their rights and push back against policies they view as detrimental to buyer choice.

A Crisis That Could Become a New Opportunity for Stores

Piers Harding-Rolls of Ampere Analytics acknowledges that the end of physical media will deal a severe blow to both game stores and the second-hand trade, but he also views the situation as a potential catalyst for innovation. He argues that retailers must diversify their offerings more aggressively and tap into the opportunities presented by the digital ecosystem.

“Many of these chains have massively reduced in size compared to two decades ago and have diversified their businesses to deal with the shift to digital sales. Calling time on physical media will mean innovating around digital games sales in-store to try and replace lost business. Overall, putting retail sales on a stronger commercial footing may prompt publishers to keep selling in shops for longer than they might have done under the current conditions,” he said.

As for any hope that PlayStation might reverse course, that appears increasingly unlikely. Reports indicate that the company’s largest disc-manufacturing facility is already pivoting its operations toward other business lines. Despite widespread backlash and even consumer-led boycott efforts, analysts maintain that PlayStation has strong commercial incentives to press forward with its strategy, regardless of community discontent.

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