A games industry analyst has predicted that physical video game software will cease to exist in less than a decade, even as US physical game spending saw a slight increase. Circana's senior director Mat Piscatella made the bold proclamation on Bluesky, stating that the overwhelming majority of game sales are now digital and that the second-hand market is becoming irrelevant.
Physical game sales trends
Piscatella shared a graph showing US physical game spending from 2007 to 2026, revealing a consistent decline since 2009. However, for the 12-month period ending May 2026, spending on physical games in the US increased by 3% over the previous year to $1.6 billion (£1.2 billion). This marks the first reversal of the downward trend since 2009.
Despite the uptick, Piscatella noted that more than half of all Xbox Series consoles in the US lack a physical drive, while over a quarter of PlayStation 5 consoles are the same. He wrote, 'We likely have less than a decade left of physical software.'
Impact of GTA 6 physical edition
The future of boxed games took a hit when Rockstar announced that physical copies of GTA 6 will only contain a download code at launch. While there are rumours that a disc version could come later, this move by one of the biggest gaming franchises signals a shift away from physical media.
Reasons for the small increase
The reason for the modest rise in physical spending is unclear, but it could be linked to the launch of the Nintendo Switch 2, whose audience typically buys more physical games than other platforms. If physical games are on the way out, a key indicator will be Sony and Microsoft's approach to their next-generation consoles. If they offer different physical and digital SKUs, rising console prices due to memory shortages might make cheaper digital options more attractive.
However, hard drives are currently second only to memory in terms of scarcity and cost, so physical copies could be more useful next generation. While it is hard to imagine a world without physical games entirely, the prospect of them becoming a niche interest reserved for specialist stores like iam8bit or Limited Run feels increasingly likely.
