Microsoft may have shut down its physical games division – WGB

The reliable Jez Corden of Windows Central has said that Microsoft has shut down its entire physical games division, the department in charge of bringing Xbox games to brick-and-mortar stores.

“Microsoft has also shut down departments dedicated to bringing Xbox games to physical retail … which if you’ve seen the digital-only Xbox console leaks … well, you can get an idea of where Microsoft is going here.” said Jez.

Microsoft has also shut down departments dedicated to bringing Xbox games to physical retail … which if you’ve seen the digital-only Xbox console leaks … well, you can get an idea of where Microsoft is going here.

— Jez (@JezCorden) January 25, 2024

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This ties into the saddening news that Microsoft is cutting 1900 jobs across its gaming divisions.

Jez correctly pointed out that while the department in charge of physical editions of games may have been shut down, it may not mean Xbox intends to cease sales of physical games. They may opt to outsource those duties instead.

Of the three consoles available, the Xbox typically has the most digital sales to physical, likely driven by the fact that the majority of Xbox consoles are the Series S which does not have a disc drive for physical games. Here in the UK, it was estimated that almost 90% of game sales in 2022 were digital.

Leaked documents also suggest Microsoft plans on its next console being focused purely on physical games. In other words, everything paints a picture of a digital future, at least in the eyes of Microsoft.

I’m personally still a lover of physical media, especially because to review as many games as possible I’ll buy a copy, beat the game and sell it in order to put the money toward the next title I want to cover. I don’t have a problem with companies focusing on digital sales, but I also believe there’s plenty of room for both to exist. However, from the perspective of Microsoft, a digital sale of a first-party title means they keep all the money, whereas a physical sale brings in less.

Supermarkets and stores are also slowly phasing out physical media it seems. Here in the UK, Tesco no longer stocks games while Asda has drastically reduced its games and movies to almost nothing. meanwhile, retailer GAME has announced plans to cease selling pre-owned titles. In the US there are reports of Walmart planning on getting rid of games as well.