There is a rather optimistic argument doing the rounds about Sony’s decision to kill physical PlayStation game discs: maybe digital games will finally become cheaper. Former Square Enix business development director Jacob Navok argues that removing manufacturing and distribution costs, combined with greater competition between publishers, could push digital prices down and create a Steam-like environment on the PlayStation Store.
Competition between publishers is what drives pricing pressure, not competition between digital stores. This is because publishers set pricing on digital stores.Competition between stores like EGS and Steam improves the take rates for developers, not necessarily the price for… https://t.co/6ZZw8EUJ5v pic.twitter.com/0QLQmclwsG
It’s an interesting theory. I just don’t buy it, at least not for PlayStation.
The biggest problem with Navok’s argument is that PlayStation isn’t Steam.
Steam exists within a much more open PC ecosystem. Consumers can buy games through Steam, the Epic Games Store, GOG, the Microsoft Store, and other legitimate retailers and key sellers. If a publisher’s game is too expensive in one place, another storefront can compete for that customer’s money.
PlayStation doesn’t work like that. There is no Epic Games Store for PS5, no GOG for PlayStation, and no authorized third-party digital marketplace selling PS5 games at a lower price. If a gamer wants to buy a digital PS5 game, Sony controls the storefront through which that transaction happens. That’s a pretty important distinction. Publisher competition is one thing; storefront competition is another. And PlayStation is missing the latter.
There is also a simpler problem with the argument: digital games already exist alongside physical games.
A digital copy doesn’t need a disc manufactured, packaged, shipped, or placed on a retailer’s shelf. Those costs have already been removed, yet a new digital PS5 game can still launch at the same price as its physical counterpart. So why would eliminating the physical version suddenly force that price down?
Companies don’t generally eliminate costs because they feel bad about charging customers. They eliminate them because better margins are good business.
Of course, it might. Publishers could choose to pass more of those savings to consumers. But they could just as easily use the additional margin to improve profitability, fund increasingly expensive game development, or simply keep the launch price where it is.
This is where the death of discs becomes particularly concerning.
A physical game isn’t just another format. It is also part of a secondary market. Players can sell games, buy them used, lend them to friends, trade them in, or hunt for discounted copies at retailers. That creates a layer of price competition around the official launch price. Digital games can’t do most of that. Retailers also have a reason to discount physical games that digital storefronts don’t. A shop has limited shelf space and physical inventory that needs to move. If Spider-Man 2 has been sitting on a shelf for six months, a retailer might slash the price to clear stock.
The disc of Spider-Man 2 PS5 😍🔥 pic.twitter.com/SSOzxp5gbK
The PlayStation Store has no such problem. Sony doesn’t need to clear digital inventory before the next shipment arrives. A digital copy can sit there forever at whatever price Sony and the publisher decide. That’s why I think physical games provide more consumer leverage than they often get credit for.
Then there’s Sony itself. Sony has already faced major legal challenges over its control of digital PlayStation game sales.