Summary
The video game industry is rapidly shifting from physical game sales to digital licensing. As publishers shift away from physical media, consumers increasingly purchase licenses rather than physical products they own. Depending on the publisher, platform, and game, access may later be discontinued or otherwise become unavailable. Sony’s recent decision to stop producing physical discs for new PlayStation games beginning in 2028 has accelerated public attention on the issue.
This memo provides background on the transition from physical game sales to digital licensing, and recent responses from consumers, industry and policymakers. Recent polling found that 57% of gamers oppose ending physical releases, while 81% of gamers who prefer physical copies cite permanent ownership as a reason for that preference.
The Shift to Digital Distribution
For decades, video games were sold primarily as physical products on cartridges, CDs, and discs. The growth of online storefronts such as Steam, Xbox Live Marketplace, the PlayStation Store, and the Nintendo eShop made it possible to purchase, download, and update games without visiting a retailer. Digital distribution now accounts for nearly all video game revenue on PC and the large majority on consoles. In 2023, digital products accounted for 95% of global video game revenue, while physical games accounted for 5%. On PC, 99% of revenue came from digital sales, compared with 83% on consoles.
The shift changed more than how games are distributed. It also changed what consumers receive when they purchase a game. A physical purchase transfers ownership of a copy of the game to the buyer. Most digital purchases instead provide a license to access and use the game under the publisher’s or platform’s terms. That distinction has become central to the debate over digital ownership.
Digital Ownership and Licensing
When consumers buy a physical copy of a video game, they own that copy and can generally keep it, lend it, resell it, or play it without relying on a digital storefront. Digital purchases work differently. In most cases, consumers receive a license to access and use the game under the publisher’s or platform’s terms, rather than ownership of the software itself. For example, the PlayStation Terms of Service state that use of game software is governed by a separate End User License Agreement, while Steam’s terms for many games expressly state that the game is licensed to the user and that “no title or ownership” is transferred.
The distinction has prompted new consumer protection proposals in California and renewed scrutiny of how digital games are marketed to consumers. California law prohibits sellers from advertising digital goods using terms such as “buy” or “purchase” in a way that implies unrestricted ownership unless consumers are clearly informed that they are receiving a license. A separate California proposal, the Protect Our Games Act, would require publishers to provide advance notice, continued access, or refunds when they discontinue support for digital games sold after January 1, 2028.
Why Consumers Are Concerned
Unlike physical copies, digital games are typically governed by license agreements and remain subject to the publisher’s or platform’s terms. As a result, access can depend on factors outside the consumer’s control, such as games that become delisted from online stores, online services may be discontinued, or publishers may stop supporting a game’s digital license. While consumers can often continue playing games they have already downloaded, access is not guaranteed in every circumstance and depends on the platform, publisher, and game.
Without physical copies, Sony also advances towards a closed gaming eco-system that forces Playstation users to purchase games only through the Playstation Storefront, building on its decision to remove external digital download codes in 2019. A Dutch consumer group, suing Sony on behalf of Dutch Playstation users, argued Sony’s 30% PlayStation Store commission will inflate game prices once physical alternatives disappear.
These concerns are reflected in consumer opinion. A July 2026 YouGov survey found that 57% of gamers oppose ending physical releases, while only 12% support the shift. Among gamers who prefer physical copies, 81% cited permanent ownership as a reason for that preference, and 70% said they worry digital games could become unavailable in the future.
Industry and Policy Response
As digital distribution has become the industry standard, publishers have argued that it offers greater convenience, faster updates, lower distribution costs, and broader access to games. At the same time, California lawmakers have responded with new consumer disclosure requirements and additional proposals governing discontinued digital games.
California has been at the forefront of that effort. A 2024 California law requires sellers of digital goods to clearly disclose when consumers are acquiring a license rather than unrestricted ownership before using terms such as “buy” or “purchase.” Building on that approach, the proposed Protect Our Games Act would require digital game operators to notify consumers before discontinuing services necessary to use a game and, in many cases, provide continued access through an offline version, software update, private server support, or a refund.
About Players Alliance HQ
Players Alliance HQ organizes gamers, developers, and creators to fight corporate greed in the gaming industry. The organization launched its campaign to block the proposed EA buyout in 2025, and has since recruited more than 2,500 Discord members, collected over 70,000 petition signatures, and hosted a Twitch stream featuring Rep. Maxwell Frost and prominent streamer lilsimsie. Since then, the organization has organized actions in Washington, DC, Redwood City, CA, Madison, WI, and Orlando, FL, and inspired a new UK spinoff campaign, Block the EA Deal UK. The campaign has been covered by The LA Times and PC Gamer.
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