As far as publishers are concerned, the single greatest cancer they face is the resale market. When a store sells a new game for £60, the publisher makes about £20, and the store gets between £15-20, depending on how they choose to price it. The rest is the cost of manufacturing and shipping. (These are rounded estimates, it varies)
Then, a week later, when someone trades that game in and the store resells it for $40, they get all of that, and the publisher gets nothing.
From their perspective, that’s basically theft, which is why they’ve been trying for decades to put a stop to it, which they can’t, or at least make more money from secondary sales by bundling single-use codes for “bonus” content that really should be part of the main game, which people who buy preowned will have to shell out extra for.
So that’s what getting rid of physical media is all about. If they get rid of the discs and cartridges, that market vanishes.
Please don’t mistake this explanation as an excuse. All of the platform holders have had the means to kill off the retail market and usher customers onto their digital storefronts for at least a decade. All they had to do was pass on even a fraction of the savings they make selling digitally, which cuts out the manufacturing, shipping, and retailer costs, onto the customer. But they haven’t. Games cost the same on the Playstation Store as they do on the Gamestop Shelf. Sometimes more!
They could have used the carrot, but pure greed means they’re now opting for the stick.
Edit, Supplemental Question: This is my first post on Lemmy, and the responses have me wanting to clarify something- Is everyone on this platform fucking mental?
Weirdly, things are kinda of reversed in this situation.
To address things in backwards, digital platforms have been a massive boon to smaller studios due to not having to front the cost for manufacturing. It allows them to take creative risks and reach broader audiences.
As for the comparison to the DVD and Blu-Ray market, things sort of happened slowly and more “naturally” in that case. The market died because streaming offered a significant value to customers so they moved away of their own accord. It was a slow process and it took years before the downsides became apparent.
With games, the platform holders and publishers haven’t bothered to offer any additional value for going digital, quite the opposite really. So the physical market has endured, and the resale market with it. Instead of learning any lessons or competing on value, they’ve decided to force the issue and just kill off the format itself.
One was a death, the other is an execution.