With speculation about the next generation of consoles ramping up, most of the focus has been on the hardware of the PS5 and Xbox Scarlet. However, analysts for an investment banking company have turned their attentions towards game distribution and predict that physical game releases may soon become a thing of the past.
The report comes from analysts Michael J. Olson and Yung Kim, and is informed by the trend of the physical game market shrinking by around 10 points per year. The report also considers the impact a 100% digital games market would have on the industry, pointing out that profit margins would be much higher for publishers as the cost of distribution would be almost eliminated.
It's a pretty bold claim, but Olson and Kim seem convinced that the dramatic shift is imminent:
"We believe it is a certainty that video games will be ~100% digital in the coming years, and while exact timing is hard to pinpoint, we think 2022 is a realistic expectation."
The phasing out of physical game distribution wouldn't necessarily mean that all games are downloaded and stored on hard drives, however; the report suggests that "streaming games from the cloud could be a commercial reality within 2-3 years." This is feasible considering that Sony and Microsoft have both made moves in this area with PlayStation Now and a similar service planned for Xbox One soon.
The predicted move to digital also includes PC, of course, which is not exactly surprising given that the distribution of PC games has been almost entirely digital for years. The claim that consoles will soon follow suit will be doubted by many, as it could be said that the internet infrastructure simply doesn't exist to allow fast downloads for everyone, and likely won't even by 2022.
The report also goes against a lot of information we've already had about the next generation of consoles. For example, former PlayStation boss Andrew House has said he thinks disc drives will be around for a while. By 2022, the PS5 and Xbox Scarlet will most likely be in the early days of their respective life-cycles, so it would be strange to see them have disc drives that go unused for the majority of their circulation.
All things considered, the report is probably going to be a contentious one. Retailers like GameStop who are already facing trouble will no doubt be praying the prediction proves inaccurate, while gamers lucky enough to have high internet speeds might welcome the change. It's a tricky prospect, but only time will tell if the industry is ready for such a big change in less than 4 years.
Source: wccftech.com