Sony stock up 7% following decision to terminate game disc production

Sony's stock went up by as much as 7% following its controversial announcement to stop producing game discs.

Investors may approve of Sony's decision to cut production of new PlayStation game discs by January 2028. Since the company broke the news on July 1, Sony's stock has gone up as much as 7%, trading from 3232 JPY at the lowest point of the day of the announcement to a high of 3486 JPY on July 3. At the time of writing, Sony's stock is currently at 3380 JPY.

Sony justified the market-shaking decision by saying that the "general preference for digital media significantly outpaces physical discs." The move to an all-digital environment will let the platform-holder better serve its users in a way that they prefer, the company says.

The raw data supports this decision, although gamers are certainly making a strong case for physical media, as breakout data from PlayStation document leaks shows a healthy split for physical media in regards to some of the platform's biggest games.

Sony's own revenue data really illustrates why the choice was made. The reality is that consumers are spending far and away more money on digital software than they are on physical games. To be clear, digital software in this case is defined by Sony as "revenue from full game downloads of both first and third party titles sold via the PlayStation Store."

According to Sony's data and based on JPY to USD conversions, physical software made up just 3% of total gross sales revenues throughout the last fiscal year, FY25, compared to digital's 23%. In terms of monetary value, Sony recorded an estimated $830 million from physical game disc sales throughout that time, compared to nearly $7 billion from digital software sales.

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One key point to remember is that there are many more digital games offered on the PlayStation Store that aren't made available in physical disc format. There's not a known quantifiable value to this--at least that we've seen--however, it's likely there are hundreds or possibly even thousands of games that are sold on the PS Store that aren't on disc. It's also worth noting that a portion of these games are not likely to move the needle on a title-by-title basis, but when lumped together, the sheer volume of digital content does outpace physical game discs.