SEGA and Ubisoft See Digital Distribution as the Future but Physical Games May Survive

SEGA and Ubisoft have shared their views on the future of physical games as the industry continues moving towards digital distribution.

Both companies believe digital releases will become more important, although neither suggested that physical media will disappear immediately. Their comments reflect a wider shift across console and PC gaming, where downloads, subscriptions and digital storefronts now account for a growing share of software sales.

SEGA president Shuji Utsumi said the company still values physical gaming culture and does not plan to abandon it completely. However, he also explained that digital products are becoming essential for reaching a wider global audience.

Ubisoft chief executive Yves Guillemot expressed a similar view. He said the transition to digital games has helped expand the PC market and argued that digital only hardware could reduce manufacturing costs. He acknowledged that removing discs creates advantages and disadvantages, but does not expect the change to cause major disruption across the industry.

Company	Position on physical games	Digital strategy
SEGA	Does not plan to abandon physical media completely	Sees digital products as important for global growth
Ubisoft	Expects the industry to adapt without major disruption	Believes digital distribution can support market growth
PlayStation	Reportedly moving away from disc based games from 2028	Greater focus on digital hardware and software
Xbox	Long term physical strategy remains unclear	Could continue supporting discs or follow wider market trends

SEGA wants to preserve physical culture while expanding digitally

SEGA’s position is more cautious than a complete move away from discs.

The company has a long history in console hardware and boxed software, particularly in Japan, where physical media remains culturally important. Utsumi said that history still matters, but SEGA must also consider how players access games in regions where consoles are less common.

PC gaming gives publishers access to markets where traditional console distribution is limited. Digital storefronts also remove the need to manufacture, ship and stock physical copies, making it easier to release games across more countries.

For SEGA, the shift appears to be about balancing both formats rather than choosing one immediately. Physical editions may remain available for major releases, collectors and markets where boxed games continue to sell well. Digital distribution, however, is likely to receive greater investment because it offers broader reach and lower distribution barriers.

That approach could lead to fewer physical releases rather than their complete disappearance. Standard editions may become more limited, while premium or collector focused packages remain available for selected games.

Ubisoft does not expect digital only consoles to damage demand

Ubisoft’s comments were made in response to concerns that removing disc drives could weaken game sales.

Physical games support the used market, allowing buyers to sell completed titles and use that money towards new purchases. A digital only model removes that option and gives platform owners greater control over pricing and availability.

Guillemot pointed to the PC market, where digital distribution became dominant without preventing overall growth. Services such as online storefronts, seasonal sales and subscriptions helped make PC gaming more accessible even as boxed releases became less common.

He also suggested that digital only consoles could cost less to manufacture. Removing the disc drive reduces the number of components inside the system, although that does not guarantee lower retail prices for buyers.

Ubisoft recognises that there are disadvantages to the transition, but it does not expect them to significantly disturb the market. The company appears confident that most players will continue buying games even if physical options become less available.

Xbox could use physical support to differentiate its hardware

Microsoft has not provided a clear long term commitment for physical Xbox games.

Continuing to support discs could help Xbox appeal to players who own large physical libraries or prefer to collect, lend and resell games. Backwards compatibility would also remain important for anyone with Xbox, Xbox 360 or Xbox One discs.

However, one platform supporting a disc drive does not guarantee that publishers will continue manufacturing physical Xbox copies. If PlayStation and major third party companies reduce boxed releases, Xbox could have fewer new discs available even if its hardware remains compatible.

Nintendo may continue using physical game cards, although its approach differs from the disc based systems used by Xbox and PlayStation.

Physical games are unlikely to vanish at once, but their role is changing. Digital distribution is becoming the standard, while boxed releases may increasingly serve collectors, limited edition buyers and players who value long term access outside a digital account.