Protest Against Sony’s All-Digital Future

As Sony continues to move forward with its plan to release all new PS5 games on physical discs, a significant number of PS5 owners have taken to social media to express their discontent. Many have cancelled their PlayStation Plus subscriptions in protest, with some even starting a high-profile petition calling on Sony to reconsider its decision.

However, according to Dr. Serkan Toto, CEO of Japanese game industry consultancy firm Kantan Games, even if half a million people cancelled their PlayStation Plus subscription in protest, it would be just a drop in the ocean for Sony. This is because Sony has over 120 million active PlayStation users, with around 50 million people subscribing to PlayStation Plus.

‘As a thought experiment, let’s say 500,000 cancel in protest, that would be just 1% of that business gone,’ Toto explained. ‘Of course, not enough to Sony to start rethinking. Digital is just too lucrative.’

Toto’s comments are not surprising, given the significant financial advantages of releasing games digitally. For a first-party PlayStation game, Sony will only keep around 65% of the money from a physical copy, with around 30% going to the retailer and roughly another 5% on manufacturing costs. Meanwhile, for a physical copy of a third-party game such as the Activision-published Call of Duty, Sony will get a licensing fee of likely around 15%.

For digital downloads, however, the margins are much higher. For a first-party game sold via Sony’s own PlayStation Store, the company obviously keeps 100% of the revenue. For third-party games such as Call of Duty, meanwhile, Sony keeps a 30% cut (so, roughly $21 for a $70 game).

But what does this mean for the future of gaming? Will Sony’s decision to move to an all-digital future be the norm for the industry, or will other console manufacturers follow suit?

According to Daniel Ahmad, Director of Research & Insights at Niko Partners, Sony’s decision is likely to have a significant impact on the gaming industry as a whole. ‘I do think Sony will respond in some capacity given the backlash (and tbh they shouldn’t have announced this until they were ready to disclose how discs would work on PS6),’ Ahmad said. ‘But I’d be surprised if they do a full reversal at this point.’

The debate surrounding Sony’s decision to move to an all-digital future is a complex one, with many factors at play. However, one thing is certain: the future of gaming is likely to be shaped by the decisions of major console manufacturers like Sony.

Will Sony’s decision to move to an all-digital future be the norm for the industry, or will other console manufacturers follow suit? Only time will tell.