Sony's decision to end game disc production for new games after January 2028 is expected to boost gaming operating profit by multiple percentage points, offering tangible growth for the PlayStation business.
From day one, PlayStation has always had discs. These were much easier and less expensive to produce in the early CD-ROM era due to the prevalence and demand for optical disc readers. That high demand doesn't exist today, and worse, companies like Sony, Nintendo, and Microsoft are all facing major shortages for console parts, leading to 5x to 7x cost increases. Sony has now decided to stop producing discs to squeeze out more profit from PlayStation, but also to create a new growth point for the business at a dire time when costs are eating into everything.
Analysts are quantifying how much money that Sony could actually recognize from the disc phase-out. According to a new report from Nikkei Asia, analysts like Goldman Sachs' Minami Munakata tell investors that discontinuing discs could increase Sony's Game & Network Services operating margin by 3% in FY28. For comparison, G&NS had a 9.9% operating profit margin over the last yearly period, FY25.
Sony expects to earn a record-breaking 660 billion yen operating profit in FY26, likely driven by decreasing operational costs (personnel, layoffs, etc), the elimination of Bungie's acquisition payouts, and other miscellaneous mechanisms.
One important clarification: Sony is currently in its FY26 period, which ends March 31, 2027. The disc phase-out is happening in January 2028, which coincides with Sony's FY27 period (FY27 ends March 2028).
The period that Munakata is referring to here is FY28, which runs from April 1, 2028 to March 31, 2029. A quick rule of thumb for Sony's FY designations--the number coincides with the year that most of the period takes place. For example, most of Sony's FY26 period takes place in 2026.
The prediction implies that Sony could return to a 12%+ profit margin that it enjoyed during COVID-19, possibly even with the revenue to match.
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