With the increase in digital game sales in recent years, the future of boxed games has become increasingly discussed. Released for the PlayStation 3 in 2007, Warhawk was one of the first major games to be available both physically and digitally, kickstarting digital media to play a major role in the gaming industry. However, the issue of whether boxed games will disappear completely remains a complex debate.
Although the future of boxed games is shaky with digital media, they still have a significant market share
Digital game sales have vastly surpassed sales of physical copies, revolutionizing the gaming industry. Large gaming companies, in particular, derive a large portion of their revenue from digital downloads and microtransactions. For example, Electronic Arts’ game sales largely consist of “recurring revenue,” that is, microtransactions made in online multiplayer games. Currently, the digital sales rate of AAA games can vary between 40 percent and 80 percent. Platforms like PlayStation report more than 70 percent of their annual digital revenue.
Capcom’s annual report stated that it expects digital game sales to reach 94 percent of total game sales in 2024. However, this rate does not mean that physical games will disappear almost completely. Capcom stated that the demand for physical games is significant and that it does not plan to withdraw these products from the market. Ubisoft’s senior manager Chris Early similarly stated that physical games will not disappear completely. However, physical game sales continue to decline.
Declining market share and continued demand for boxed games
Today, boxed games make up a small portion of the overall gaming market. In 2023, only 17 percent of console games were boxed copies, but that still equates to $9.5 billion. This figure is higher than the total of last year’s highest-grossing films. Last year, when Sony sold 286 million games, it was calculated that 85 or 86 million of them were physical copies. This shows that boxed games are not completely gone, but still have a significant market share.
On some platforms, like the Nintendo Switch, physical game sales are performing stronger than digital sales. About half of Nintendo’s software revenue comes from physical copies. Additionally, some major AAA games and first-party titles are performing strongly in physical copy sales, especially during the holiday season. Companies like Limited Run Games physically print small digitally released games and offer them to collectors. Limited Run CEO Josh Fairhurst stated that physical media will always remain in demand.
Will there be a place for physical games in the future?
Xbox’s discless Series S model and digital services like Game Pass make the future of physical games uncertain. Although Microsoft has stated that it is not planning a definitive change in strategy regarding physical media, Xbox’s trend towards digital media continues. Analysts expect Xbox to switch to an all-digital model in the future, while Sony predicts it will support physical media for at least two more generations. Phil Spencer stated that Microsoft will not completely abandon physical media.
The advantages of physical media are diminishing; discs and cartridges now require installation and often come with major updates. The rapid access and convenience offered by digital media reduces the appeal of physical media. However, some gamers are concerned about the risk of digital media being lost, so they are turning to physical games.
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Although boxed games have struggled with the rise of digital media, they are far from disappearing completely. Physical games still hold a significant market share and remain in demand among collectors and traditional gamers. The balance between the advantages of physical media and the conveniences offered by digital media will determine what direction the gaming market will take in the future.
