CyberConnect2 CEO says the shift from physical to digital-only games is “nothing but a positive thing” for developers
CyberConnect2 CEO Hiroshi Matsuyama talks about what the shift from physical to digital games means for developers.
CyberConnect2 CEO Hiroshi Matsuyama recently posted a video on his social media talking about how video game companies, and his company specifically, will be affected by the gradual decline of physical game discs. The video is part of a series, largely posted on TikTok, in which he answers new hires’ questions about the video game industry.
With Sony announcing that it will be discontinuing physical releases for the PlayStation starting 2028, and as Blu-ray manufacturers in Japan begin to exit the market, many gamers are concerned about how the shift will impact the industry as a whole – especially from the perspective of issues like media preservation and “ownership” of digital content.
However, in the video, Matsuyama argues that a total shift towards digital game distribution would be “nothing but a positive thing” from the perspective of game developers.
First, he mentions the issue of the difference in profit earned from physical releases vs digital downloads. Specifically, he explains that physical copies heavily rely on the low-margin, high-volume strategy in order to be profitable. Since CyberConnect2 and, by extension, other video game developers have to buy discs and cards directly from Sony and Nintendo to be able to produce physical games for the respective consoles, going fully digital means these costs would be reduced to zero.
“Culturally, physical copies were a normal thing, so I understand why some people might dislike to see them gone. However, nowadays, they can’t win in terms of convenience,” Matsuyama notes. Citing the recent examples of Capcom and Square Enix, he explains that more than 90% of video game sales currently come from digital downloads, with physical copies taking up less than 10%. In that sense, Matsuyama suggests that it’s not realistic to keep the production lines running for less than 10% of sales.
“Developers work for their salaries, and thinking about how to raise profits and boost sales is something you must do as a professional. If you want to release physical games even if it means that salaries will be reduced, then sure, I can make it happen – but I don’t think there’s anyone willing to do that,” Matsuyama says.
While he considers continuing to work “for a minority of collectors and enthusiasts” is not feasible in the long run, Matsuyama doesn’t think physical “packages” will disappear so suddenly. Boxes containing a download code with extra content or bonus merchandise are still going to be a thing, specifically to cover the niche of collectors and diehard fans, he suggests. Discs, on the other hand, “are doomed to fail.”
An issue Matsuyama raises specifically when it comes to discs is that modern games are too large to fit on a physical CD. “It’s a day and age where a single game surpasses the size 160GB or 200GB. GTA 6 is too big to fit on a physical disc, and BluRay discs are capped at 80GB, so how many CDs would you actually need for that? I don’t think delivering something so inconvenient to customers is a good thing. If you look up the maximum capacity of a Switch cart, you’ll know that games now are too large to fit. That’s why they’re shifting to digital releases,” he argues.
Matsuyama explains that, while he understands many people will be sad about physical media fading away, admitting that he himself feels sad about it, “we in the entertainment industry need to show everyone what the future holds.”
“I think it’s important to make that shift. As for what kind of impact it will make, there will be nothing but positive things, profitability will rise much faster, and developers will get more bonuses.”
Đorđe P
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Coming from a company that had one of THE coolest physical releases of my youth in the .Hack games, that hurts.
I was obsessed with the og .hack series, the box art lined up to make a picture, it had an extra OVA in each box that had secret codes to unlock secret level word combinations which often contained lore from the //Sign anime.
They did some of the coolest physical releases i ever got my hands on, sad to see that even they’ve turned towards people not owning their stuff.
I’m right there with you. My partner and I LOVE .dot//hack and had planned on buying any form of Collector’s Edition they cook up for Z.E.R.O, but now all we can “buy” are digital licenses. Boy have times changed. 😔
Welp, never giving them money again 🙂
Well of course it’s easier for developers. There’s a lot of things that’s easier on developers, like using AI. Doesn’t mean we should do it 😮💨🙄
Talking about SqEx and Capcom that 90% of their sales is digital while counting everything sold against PS/Xbox physical releases is little bit wrong.
(PC doesn’t have physical games so it is 100% digital, so all copies are just adding to digital percentage. And if they are counting the DLC and other digital only stuff then yes it’s 90:10 but if they would just look only at things with physical release compare it to digital then the percentage would be different, not to mention that if you look for some of those games they are sold out without additional printing and as such all subsequent sales are digital only)
Well unfortunately everyone is talking about benefits for developers and so on. But noone is talking about issues for end customer. Like download times, service outages, ownership, etc.
Funny that the savings doesn’t trickle down to the consumer. Yeah, you’ll save money by not making physical copies, but gleefully tack on $20 more to the average for a game requiring a DLC later that you pay more for for the full experience.
He uses Sqaure and Capcom’s skewed results to justify it lol. Of course PC is full digital. Physical releases also help people discover these games. The casual market doesnt follow along for every game release so now all your extra profits will be spent trying to get front and center in a digital store alongside all the other slop that makes discoverability impossible. Wonder why all these companies still make download codes that go to retail?!? If they want larger margins it means skipper the middleman, but the middleman is providing value and these companies know it – GTA 6 codes arent being put into a case and shipped around the world because it’s economical. Small studios will be crushed. If he thinks swapping a disc one time to install the game is inconvenient then what about everyone who doesnt have internet capable of downloading hundreds of gigabytes a day? Why would i pay full price for a rental. With digital there’s no reason for me to buy a game (especially niche like theirs) at full price at launch just to get a copy. The digital version will be there when I’m ready (hopefully) and probably on sale. This strategy will backfire so hard for them (it’ll probably work fine for larger studios) and if their only justification is “bigger bonuses” then I really don’t care if they go under. I swear these people cant see more than 3 months in the future. –and I also think it’s comical as hell that he thinks hardcore fans are going to buy physical items when theyre too cheap to make a disc. If it’s inconvenient to put a disc in and take up space why would I want a large item that literally just sits there. This cherry picking of gaming desires results in such a small pool of people.
Never got into this series, now I’m sure I never will after seeing this crap on my feed. Nothing but a positive thing my ass. Sony can go pound and and so can this guy.
And my physical copy of Fuga 3 just arrived last month! 😭😭😭
I sure hope this franchise is just a trilogy because now I really don’t want to buy anymore games from them after what they said.
Sooooo… If YOU’RE stripping me of the physical option, what stops me from getting the game digitally from a certain girl with a spoon? You’re too daft to be talking about it mate.
Then he is a fool.