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- Amid concerns about declining profitability, there are rumors that Walmart may stop selling Xbox packaged games as early as 2024.
- However, the changes have sparked a debate over ownership and longevity of the game, causing anxiety among users familiar with trade-in systems and tangible assets.
- Conversely, niche, smaller retailers may ultimately benefit from this change, serving those who still prefer physical formats, mirroring trends in other industries.
Rumors are circulating that Walmart is on the verge of phasing out physical Xbox game sales as early as next year. The origins of these rumors can be traced back to previous reports that highlighted the decline in physical game sales. Such a downturn will inevitably shape the distribution strategies of major retailers and publishers.
Best Buy, one of the world’s leading electronics and game retailers, has also been embroiled in talk of ceasing in-store sales of games in its physical stores. With digital game sales overwhelming physical game sales, Best Buy estimates that profitability from physical game sales is declining. Now, Walmart is following in these footsteps, with indications that Xbox titles are its primary target.
John Fairhurst, CEO of Limited Run Games, a company known for creating physical releases and re-releases of digital and vintage games, fueled this rumor. Fairhurst revealed that there are whispers within the industry that Xbox physical gaming could be the first to face the axe, with other platforms potentially suffering a similar fate in the future. . He expects this trend to continue next year and that other retailers may adopt similar strategies.
I expect this trend to continue into 2024. I’ve heard rumors that Walmart will be discontinuing physical games on Xbox soon, and I have to imagine that the physical games section will be further reduced for next year. https://t.co/iKIEaDEGmf
— Josh Fairhurst (@LimitedRunJosh) October 12, 2023
In a rapidly digitizing world, it’s no surprise that retailers are facing obstacles when it comes to selling games in-store. Fairhurst has proven such a challenge and predicts that the physical gaming section will decline over time. His speculation also includes the possibility that Microsoft will take the initiative and stop distributing physical game discs altogether.
Despite the global shift to digitalization, physical gaming still thrives in certain regions. Japan, for example, is seeing strong demand for physical gaming media, especially in the area of Nintendo titles. Fairhurst even believes that Nintendo will continue to stick to the physical format for several more generations of consoles. Additionally, specialty retailers like local stores could make a comeback, catering to niche gamers with an affinity for specific releases, he said.
Additionally, the 2024 horizon appears to be in line with market trends. An “official” leak suggests that Microsoft will announce two new digital-only consoles in the same year.
However, for every action there is a reaction. Phasing out physical games from major retailers could help companies like Limited Run Games grow. Digital sales dominate the current market, accounting for as much as 89.5% of video game purchases in 2022, but ownership and control remain controversial. While physical games provide players with tangible assets, digital titles make gamers dependent on the platform and there is no guarantee of long-term access.
As gamers facing this transition, many have expressed their concerns. Some people, especially those who grew up in a time when collecting physical games was an integral part of the experience, feel discouraged by the potential transition to an all-digital paradigm. The same group is nervous about being tied down to a single store ecosystem for consoles and craves the flexibility of trading and selling digital games. This is a luxury you used to enjoy with physical copies. But at the end of the day, money wins.
Although the tradition of gaming trading is often ridiculed for not making big profits, it is true that it provides a cushion against the full cost of purchasing new titles. This trade-in system is promoted by retailers like Gamestop and turns your $60 outlay into a net $30-$40 or so. However, it is the retailer who bears the greatest risk.
The move into the realm of primarily digital games is unstoppable. As with all change, it is not without its fair share of supporters and opponents. The challenge lies in balancing convenience, profitability, and consumer preference.