Sony Ends Physical Discs For Games By 2028, Why GameStop Needs eBay Or Another Growth Plan

Sony Group Corp ‘s (NYSE: SONY ) plan to kill physical PlayStation discs by 2028 adds pressure on GameStop Corporation (NYSE: GME ), a franchise scrambling to diversify beyond game sales. "In response to shifting trends in consumer preference, new games will be released on PlayStation Store and at retailers in digital formats only," the company announced on Wednesday. Sony framed the move as a response to current trends. Future titles are now being sold as digital downloads or as physical cases with a download code.

For Sony, the change won’t affect games already released or currently in the pipeline. " Physical Discs: Things Of The Past? The change comes after it was announced that the highly anticipated "GTA VI" game from Take-Two Interactive (NASDAQ: TTWO ) would be available as a digital release or as a physical gaming case with a digital code to download. The game is the first high-profile release to not be released with a physical version for consoles.

With new consoles expected from both Sony and Microsoft’s (NASDAQ: MSFT ) Xbox division in the coming years, physical games could be a thing of the past. The current Xbox console has the Series S, which has no disc drive and counts on users downloading games digitally. Read Also: Take Two Stock Has More GTA 6 Upside: ‘Could Monetize At 2X The Predecessor’ How It Impacts GameStop For years, GameStop has been one of the top retail locations for video game fans to get their video games. After years of midnight releases and fans camping outside stores, the industry shifted.

Digital downloads let players start as soon as the clock strikes. This shift has led to less physical games bought each year, hurting one of the key lines of GameStop’s business. GameStop counts on new game releases and used game releases for a key portion of its business. Those two items are both now under pressure with Sony’s latest news.

While this is two years away, GameStop investors should be aware of the change. The good news is GameStop CEO Ryan Cohen has recognized shifts in video games and has already been closing unprofitable stores and putting a greater emphasis on items like collectibles to offset lower video game sales. 7% year-over-year The software category that includes games saw the biggest decline. 3% in the prior year.

3% of total revenue. Enter eBay While GameStop has put a bigger emphasis on non-gaming revenue, the company also has bid to acquire eBay (NASDAQ: EBAY ). The auction company rejected the deal. However, Cohen remains confident in his ability to maneuver to get the company.

A merger with eBay would put even less emphasis on physical video games going forward and could make Sony’s announcement less material to the company. Right now, the Sony news is painful for GameStop but likely baked into projections somewhat and already a concern that Cohen has been trying to outmaneuver. com