Physical game sales in the United States fell to their lowest monthly level on record in July 2026, adding more context to Sony’s decision to stop manufacturing new PlayStation game discs from January 2028.
US spending on physical games reached just $85 million for the month, the weakest total recorded since market tracking began in 1995.
The decline is part of a much longer shift toward digital distribution, with physical software now representing a much smaller part of the overall games market than it did during its peak years.
Physical spending has fallen sharply
The July figure shows how limited physical software sales have become across the US market.
Only two PlayStation games reportedly sold more than 10,000 physical copies during the week ending July 11, while just seven PlayStation titles had passed 100,000 physical units in the US year to date.
| Physical sales metric | Figure |
|---|---|
| US physical game revenue in July 2026 | $85 million |
| Yearly physical spending in 2025 | $1.5 billion |
| Physical spending peak in 2008 | $11.6 billion |
| Decline from 2008 peak | About 87 percent |
| Nintendo share of physical spending | 63 percent |
| PlayStation share | 32 percent |
| Xbox share | 4 percent |
The contrast with 2008 is especially large.
US physical software spending reached $11.6 billion that year. By 2025, the figure had fallen to $1.5 billion, representing a decline of roughly 87 percent before accounting for inflation.
Nintendo now dominates the remaining physical market
Nintendo platforms account for most of the physical spending that still exists.
Around 63 percent of tracked physical game spending comes from Nintendo platforms, while PlayStation represents 32 percent.
Xbox accounts for only about 4 percent of physical spending in the US so far this year.
That makes Sony’s position different from Microsoft’s.
PlayStation still has a meaningful physical audience, but the broader market continues to shrink quickly enough that maintaining manufacturing and distribution infrastructure becomes harder to justify.
Sony plans to stop new PlayStation disc manufacturing in 2028
Sony has already confirmed plans to end production of new physical PlayStation game discs in January 2028.
The decision has faced criticism from players who prefer physical ownership, resale, collecting, lending, and offline access.
Developers and industry figures have also raised concerns about preservation and long term access.
However, the latest sales figures help explain the financial reasoning behind Sony’s strategy.
A market generating only $85 million in physical software revenue across all publishers and platforms in one month is very different from the market that supported large scale disc manufacturing during earlier console generations.
Hardware spending is also falling
The decline is not limited to boxed games.
US console hardware spending fell 29 percent compared with July 2025, reaching $282 million.
Unit sales dropped even more sharply, falling 39 percent year over year.
At the same time, the average price of a new console increased 16 percent to $542.
That suggests higher hardware prices are contributing to weaker demand, even as the industry prepares for another generation of consoles that could be more expensive.
Digital distribution continues to reshape console gaming
The physical market still has practical advantages.
Discs can support resale, collecting, lending, and offline installation. They also reduce dependence on digital storefronts remaining available indefinitely.
But the commercial direction of the market is increasingly clear.
Most software spending now happens digitally, and publishers can avoid manufacturing, packaging, shipping, and retail costs when games are sold through digital storefronts.
That creates strong financial pressure to reduce physical distribution.
Xbox may still take a different approach
Microsoft’s long term disc strategy remains less clear.
Recent reports have suggested the next Xbox could retain some form of physical media support, which would give Microsoft a different position from Sony if that happens.
For players who strongly prefer discs, that could become an important difference between the two ecosystems.
For now, Sony’s decision remains controversial, but the latest US sales data makes the business case easier to understand.
Physical games are not disappearing overnight, but the format is now a small part of a market that has shifted decisively toward digital purchases.
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