CyberConnect2 CEO Backs Digital-Only Games as Physical Media Debate Intensifies

The argument over physical games versus digital downloads has returned to the forefront following Sony's planned move away from producing new physical game discs for PlayStation consoles in 2028. For players, the prospect has raised familiar concerns around ownership, preservation, resale, and the simple satisfaction of having a game on a shelf. For developers, however, CyberConnect2 CEO Hiroshi Matsuyama sees a digital-first future very differently.

Matsuyama, whose studio is known for series including Naruto: Ultimate Ninja and .hack, has argued that a full transition away from physical distribution would be a positive development from a game maker's perspective. In comments shared on X and translated from Japanese, he framed the subject primarily as a business and production issue rather than a question of nostalgia or collecting.

His central point is straightforward: making boxed games costs money before a copy ever reaches a customer. Digital sales avoid a number of those upfront expenses, potentially leaving a larger share of revenue with the publisher and developer.

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Why physical editions cost developers more

For a studio releasing a game physically, producing the software is only one part of the process. Matsuyama noted that companies must purchase discs or game cards through platform holders and manufacturing partners, including companies such as Sony and Nintendo. Those copies then need packaging, distribution, retail placement, inventory management, and, in some cases, replacement or discounting if stock does not sell as expected.

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Digital distribution does not eliminate every cost. Developers still face platform fees, marketing expenses, certification work, server needs, customer support, post-launch patches, and the growing costs associated with making modern games. But it removes the need to commit money to manufacturing physical units in advance. That distinction can matter especially sharply for independent studios and mid-sized developers, where a misjudged print run can turn into a significant financial risk.

"It's important to make that shift," is the conclusion Matsuyama reached, arguing that greater profitability could ultimately benefit the people making games. In his view, stronger returns can support salaries and bonuses rather than being absorbed by the added expense of physical production.

That does not mean the executive dismissed the reasons people continue to value discs, cartridges, and special editions. He acknowledged that physical copies have long been culturally normal for players. For many buyers, a physical release is still a tangible record of a purchase, a collectible item, and an option that can be shared, traded, resold, or preserved independently of a storefront account.

Nevertheless, Matsuyama believes physical media can no longer compete with the convenience of downloads for the broader audience. A digital game can be purchased without a store visit, preloaded before launch, patched automatically, and accessed from a player's library without handling a disc. For consumers accustomed to that speed and accessibility, he argued, boxed products face a difficult battle.

Digital sales have already become the dominant model

The larger market has been moving in this direction for years. Matsuyama pointed to Capcom and Square Enix as examples of major publishers whose sales are overwhelmingly digital, putting the share at more than 90% in the cases he referenced. Exact proportions can vary by game, region, platform, and reporting period, but the trend is clear: digital storefronts now represent the primary route through which many new games are sold.

That shift is not solely the result of publishers pushing customers away from retail. Digital storefronts have changed buying habits through sales, pre-orders, downloadable expansions, season passes, subscriptions, and immediate access. The rise of live-service games and titles that receive constant updates has also made the distinction between a disc and a downloadable build less simple than it once was.

Even when a player purchases a disc, the installation may be followed by a large day-one update. In other cases, significant portions of a game may require an internet connection, additional downloads, or continuing server support. As a result, some consumers believe physical media no longer provides the self-contained ownership it once did, while others argue that a disc with a playable version of a game remains far more valuable for preservation than a license tied entirely to a digital store.

Matsuyama's position is focused on the developer side of that divide. He argued that studios work to pay their staff, and that asking them to retain a more expensive distribution method largely for collectors and enthusiasts would mean accepting reduced financial returns. He suggested physical releases could still be produced if a team were willing to absorb that cost, but questioned whether employees would realistically favor lower compensation in order to maintain them.

The GTA 6 storage question

Matsuyama also used Grand Theft Auto 6 to illustrate another pressure facing physical media: file sizes. He characterized Rockstar Games' upcoming release as digital-only and argued that it is simply too large to fit on a physical disc. More broadly, he said that many contemporary games have grown beyond the practical limits of physical formats, helping accelerate the move toward downloads.

Game sizes have undoubtedly expanded as developers pursue larger worlds, higher-resolution textures, more detailed audio, cinematic assets, and increasingly complex systems. Open-world games are particularly associated with enormous installations, and major releases can occupy substantial portions of console storage. However, the relationship between game size and physical distribution is more complicated than a single limit. Physical formats have different capacities, games can be distributed across multiple discs, and publishers may choose combinations of disc data and required downloads.

For players, that nuance matters. A large install does not automatically make a physical edition impossible, but it can make it more expensive or less convenient to produce. If a publisher must use multiple discs, pay for higher-capacity media, or still require a substantial online download, the economic case for a boxed version becomes weaker. That is closer to the business reality Matsuyama is highlighting: the question is not only whether a game can technically fit, but whether the cost and compromises are worthwhile for a market in which most customers may already buy digitally.

Collectors and preservation advocates remain unconvinced

The case for digital distribution may be strong on convenience and margins, but the objections to an all-digital industry are equally substantial. Digital games are often licenses governed by platform rules. A title can be delisted, a storefront can close, an account can be inaccessible, or an online-only feature can stop functioning. In an entirely digital ecosystem, consumers may have less control over how long they can download and use games they purchased.

Physical ownership is not a perfect answer, particularly in an era of unfinished launch builds and mandatory patches. Still, a disc or cartridge can offer an additional layer of access. It can be lent to a friend, sold second-hand, displayed, or retained without relying on a specific account remaining in good standing. For archivists and historians, physical copies can also be important artifacts, even when they do not contain the definitive final version of a game.

There is also a consumer-price concern. Retail competition, used-game sales, borrowing, and clearance discounts can give players alternatives to the prices set by digital storefronts. A download-only future may be more efficient for publishers, but players worry it could leave them with fewer options after release.

Matsuyama did not predict an instant disappearance for every kind of physical product. He suggested that boxed releases containing download codes could remain part of the market for a time. Such packages may preserve the giftable and collectible qualities of a retail item, though they do not address concerns about a game existing only as a downloadable license.

A transition that will not satisfy everyone

The debate is unlikely to be settled by a single executive's view, because both sides are describing real priorities. Developers want a distribution model that reduces risk and gives studios a better chance to reward their staff. Players want convenience, but many also want durable ownership, competitive pricing, and confidence that their libraries will survive changes in technology and corporate strategy.

For Matsuyama, the financial conclusion is clear: digital distribution can raise profitability faster and potentially create more room for bonuses and healthier studio economics. His argument does not claim that physical games lack value to fans. Instead, it contends that serving a shrinking physical audience may no longer be sustainable as the default expectation for every release.

Whether the industry's digital future delivers those benefits broadly will depend on how platform holders and publishers handle pricing, access, preservation, and consumer rights. The end of discs would not merely change where games are purchased. It would reshape what it means to own them.