Anyone who watches the gaming industry knows that the console market is rapidly shifting from games sold on physical media to the dominance of digital downloads that PC gamers have known for years. But a new exclusive analysis of NPD Game Pulse data, conducted by Ars Technica, shows the magnitude of the decline in physical console game production, even as the number of digital console titles continues to explode.
In terms of various game titles released in the United States, the raw number of new games available on physical media (i.e., discs or cartridges) has fallen from 321 in 2008 to just 226 in 2021, a drop of nearly 30 percent (games released on multiple consoles are counted as one title in this measure).
In contrast, the number of digital games released each year remained relatively flat from 2018 to 2020. Thereafter, that number exploded to nearly 2,200 digital titles in 2021, a 64 percent increase from 2020.
All things considered, the share of all new console games available exclusively as digital downloads rose from 75 percent in 2018 to nearly 90 percent in 2021.
An uneven trend
The decline in various physical releases is not felt equally across the major consoles. On PlayStation consoles, the total number of new physical releases fell by more than 38 percent from 2018 to 2021, following a nearly 31 percent drop on Xbox consoles. On the Switch, the total number of new physical releases fell by less than 7 percent over the same period.
In contrast, the number of different downloadable titles rose significantly in 2021 across all three console families. That was especially the case on the Switch, where the number of new digital releases increased by 63 percent from 2020 to 2021.
These divergent trends suggest that the decline in new physical releases isn’t just an artifact of consoles like the Xbox One and PS4 approaching the end of their lifecycles. Instead, publishers as a whole seem to view a physical release as a less relevant market for an increasing proportion of titles.
But the transition from physical console games is not evenly distributed across all publishers. The largest publishers are much more likely to endure the hassle and expense of a physical release for their selective titles.
Among the major publishers, a small majority (56.4 percent) of the various titles released in 2021 were available as physical releases. However, that’s still a big drop from 2018, when nearly 80 percent of those publishers’ titles earned a physical launch.
(For this analysis, we defined major publishers as the publishers with the most total annual revenue, including: Activision Blizzard, Bandai Namco, Capcom, EA, Konami, Microsoft/Bethesda, Nintendo, Sega, Sony, Square Enix, Take-Two, Ubisoft , and Warner Bros. Interactive.)
However, when those big publishers are filtered out, physical game releases quickly become a very small part of the market. Only 8.1 percent of new games from those smaller companies were available on physical media in 2021, a decline in both proportion and raw numbers from 2018.
The Niche Ening
Of course, just looking at the number of unique titles that have been released will give you an incomplete picture of the console game market. Games that deserve a physical release tend to be some of the most popular titles of the year and probably attract more overall sales than the vast majority of lower digital releases. These release numbers also don’t provide insight into what portion of sales go to the physical versions of games that are available as both discs and downloads.
But data from elsewhere also supports the idea that games on physical media are rapidly becoming a smaller part of the console market. Capcom said last year that 80 percent of new game sales were digital downloads, while Sony’s fiscal 2020 results showed a majority of full PlayStation game sales came as digital downloads.
There is plenty of other data that goes back years and points in the same direction. The wide availability of cheaper console options without a disc drive from Sony and Microsoft in recent years also suggests that physical releases are becoming relatively less important.
The decline in physical options is becoming increasingly relevant to players, given the limited lifespan of digital console game stores. The impending closure of the Wii U and 3DS eShops means that hundreds of digital games on those platforms will no longer be for sale. Conversely, if those games were also available on physical media, they would live on in the secondary market.
Physical games aren’t going to disappear completely anytime soon. As long as there is a market of game collectors who appreciate a tangible product, there will be physical discs and cartridges to satisfy that market, akin to vinyl records in the music industry (whose sales have actually increased recently).
But the physical release details make it clear that console gaming’s digital transition is fast approaching its endgame. In the coming years, games released on physical media seem to become an increasingly niche problem.
