Rumors are circulating, claiming that Walmart is on the verge of phasing out the sale of physical Xbox games as early as next year. The catalyst for such rumors can be traced back to an earlier report, highlighting a dip in physical game sales. Such downturns are inevitably shaping the distribution strategies of major retailers and publishers.
Best Buy, one of the globe’s predominant electronics and gaming retailers, has also been enveloped in talks of stopping in-store sales of physical games. With digital game sales overpowering their tangible counterparts, Best Buy posits that the profitability of selling physical games is dwindling. It’s now suggested that Walmart is following in these footsteps, with Xbox titles being the primary target.
John Fairhurst, CEO of Limited Run Games – a company renowned for crafting physical releases or re-releases of digital and vintage games – fueled the rumors. Fairhurst disclosed that whispers within the industry indicate that Xbox physical games could be the first to face the ax, with other platforms potentially meeting a similar fate down the road. He sees it as a trend that will continue onto next year, potentially prompting other retailers to adopt the same strategy.
I would expect to see this trend continue in 2024. I've heard rumblings that Wal-Mart is dropping physical Xbox games soon, and I have to imagine further cuts to physical gaming sections will be made as we get deeper into next year. https://t.co/iKIEaDEGmf
— Josh Fairhurst (@LimitedRunJosh) October 12, 2023
In a rapidly digitizing world, it’s not surprising to find retailers facing hurdles with in-store game sales. Fairhurst attests to such difficulties, forecasting a reduction in the physical games section over time. His conjectures also encompass the possibility of Microsoft leading the charge in discontinuing the distribution of physical game discs entirely.
Despite the global shift towards digitization, certain territories still hold a flame for physical games. Japan, for instance, observes a robust demand for physical gaming media, especially in the realm of Nintendo titles. Fairhurst even believes that Nintendo will remain anchored to the physical format for several more console generations. Furthermore, he says that specialized retailers – like local stores – could experience a revival, catering to the niche of gamers with an affinity for tangible releases.
Furthermore, the horizon of 2024 seems to be aligning with market trends. “Official” leaks hint at Microsoft unveiling a pair of new digital-only consoles in the same year.
However, for every action, there’s a reaction. Phasing out physical games from major retailers might fuel the growth of companies such as Limited Run Games. Although digital sales dominate the current market – accounting for as much as 89.5% of video game purchases in 2022 – there remains a debate about ownership and control. Physical games provide players with a tangible asset, whereas digital titles leave gamers dependent on platforms, with no guarantee of long-term access.
As gamers with this transition, many are expressing their reservations. Some, especially those who have grown up in an era where collecting physical games was an integral part of the experience, feel disheartened by the potential shift to an all-digital paradigm. The same group feel apprehensive about being shackled to single-store ecosystems on their consoles and yearn for the flexibility to trade or sell their digital games – a luxury they enjoyed with physical copies. But, at the end of the day, money wins.
It’s true that the tradition of trading in games, although often ridiculed for not offering substantial returns, provides a buffer against the full cost of purchasing new titles. This trade-in system, facilitated by outlets such as Gamestop, turns what might be a $60 expenditure into a net cost of around $30-$40. However, it’s the retailers who take on the highest amount of risk.
The march towards a predominantly digital gaming realm is unstoppable. As with all changes, it won’t be without its fair share of proponents and detractors. The challenge will lie in balancing the scales of convenience, profitability, and consumer preference.
