Sony Cites Strong Financial Argument Against Physical Games

Sony’s reported plans to phase out physical discs for new games could boost the operating margin of the company’s gaming division, according to Goldman Sachs analyst Minami Munakata.

Sony will phase out physical discs for new games starting in January 2028, and analysts believe this will allow PlayStation to significantly increase its operating margin.

PlayStation fans hope that player criticism will force Sony to change its plans. However, the company has a strong financial argument in favor of digital releases.

According to Nikkei Asia, Goldman Sachs analyst Minami Munakata believes that eliminating disc production could increase the operating margin of Sony’s gaming division by 3 percentage points in the 2028 fiscal year. In FY25, it was 9.9%. As a result, the figure could exceed 12%, returning to pandemic-era levels.

Sony is currently facing rising expenses, including component costs, so cutting costs could noticeably impact profits. The effect of dropping discs is expected to be especially pronounced in FY28, which runs from April 1, 2028, to March 31, 2029.

Sony expects 660 billion yen (about $4.3 billion) in operating profit for FY26, driven in part by reduced expenses and the conclusion of certain acquisition costs related to Bungie.