Sony's announcement that it will cease the production of physical PlayStation game discs starting in January 2028 has sparked intense debate over the industry's digital transition. Amidst the fiery clash of pros and cons, the head of CyberConnect2, the Japanese developer famously known for the Naruto: Ultimate Ninja series, has caught everyone's attention by offering a surprisingly pragmatic and positive take on going digital.

On October 2nd, CyberConnect2 CEO Hiroshi Matsuyama took to X (formerly Twitter) to post a short video addressing the question, 'How does the shrinking market for physical game packages impact the company?' The clip is part of an ongoing video series where Matsuyama answers industry-related questions from new recruits via platforms like TikTok.

Matsuyama assessed that while moving away from physical media to digital is culturally a bit sad, it is fundamentally a positive shift from a developer's perspective. Traditional physical packaging relies heavily on low-margin, high-volume strategies, and independent studios like CyberConnect2 are forced to purchase discs and cartridges directly from platform holders like Sony or Nintendo. Shifting to digital drastically slashes these logistical costs.

Citing Capcom and Square Enix as prime examples, Matsuyama emphasized that over 90 percent of gaming revenue now stems from digital downloads, with physical sales lingering below the 10 percent mark. Keeping physical production lines humming in such a climate simply makes no economic sense. The developer noted, 'Professionals work to get paid, and naturally, we have to think about how to boost profits and drive sales. If someone wants to release physical games even if it means taking a pay cut, they are welcome to try, but nobody in their right mind would.'

Matsuyama predicts that physical items bundled with download codes targeted at collectors and hardcore enthusiasts will not vanish entirely anytime soon. However, standard game discs are ultimately 'destined to disappear.' He pointed out, 'We are living in an era where a single game easily exceeds 160GB or 200GB. Grand Theft Auto VI is simply too massive to fit on a single disc, and standard Blu-ray discs are capped at around 80GB. Just look at the maximum capacity of Nintendo Switch cartridges—they are woefully inadequate for modern games. That is precisely why the industry is pivoting to digital.'