The logistics of buying new games on discs, especially big titles like GTA 6, just don't make sense for consumers, Take-Two CEO Strauss Zelnick says.
Take-Two's latest Q1'FY27 earnings call offers further evidence of gaming's continued shift towards digital access. In the call, company CEO Strauss Zelnick commented on Sony's decision to cease disc production for new games released after 2028.
Zelnick was specifically asked if Sony's decision to phase out disc production would have any impact on Take-Two's gross margin. The question implies that TTWO could benefit from the cost reduction that comes from moving to discs to code-in-box software delivery, and while this wasn't really addressed, Zelnick did say that buying big games in disc format just isn't sensible for consumers any more.
It's unclear what the costs for disc production are for individual publishers like Take-Two Interactive, but the company still apparently intends to ship physical media to store shelves. And in some cases, possibly re-issuing limited disc prints, not unlike what Limited Run Games does for its products.
Question: "Will you continue to sell boxed download codes in a similar gross margin, and presumably at a similar scale going forward?"
Strauss Zelnick, Take-Two CEO: "Look, our business is well over 90% digitally-distributed as is. It's already a digital business.
"So, in certain instances, especially if it's a big game, discs--and note I said discs--just don't really make sense for the consumer.
"Also, most instances you have to register online to play anyhow. So if you're already connected, who cares if you download digitally? It's all the same and it's much more convenient.
"So that's where the world is going, in our opinion, and I think Sony understands that. We certainly understand that. It doesn't mean that we won't have physical editions now and then, I'm sure we will in the same way that there's still vinyl in the recorded music business. But in other instances, it just won't make sense."
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