Physical video games have been on a downward trajectory for years, and 2026 is no exception. Despite some optimism sparked by the resurgence of DVDs and Blu-rays, the video game market remains firmly entrenched in its shift toward digital dominance. With the Switch 2 and other platforms embracing game key cards tied to online downloads, the core value of physical video game ownership is under increasing pressure. Here’s where the industry stands today and why physical media fans still have reason to worry.

Physical video game spending hits a 1995 low

In 2025, spending on physical video games in the United States dropped 11% compared to 2024, reaching an all-time low since 1995: $1.5 billion. While smaller declines were recorded in prior years (8% in 2021), the industry faced a steep 28% contraction in 2024, making 2025’s figures somewhat stabilized by comparison. According to Matt Piscatella of Circana, a data firm specializing in video game sales, much of this stabilization stems from the launch of Nintendo’s Switch 2 console. Still, even this new hardware wasn’t enough to reverse the overall trend.

The impact of game key cards

One reason for this continued decline lies with the very nature of physical games on new platforms. The Switch 2, for instance, leaned heavily on game key cards—cartridges that lack actual game data and instead act as a download code tied to Nintendo’s eShop. These key cards allow games to be purchased physically and even resold, but they don’t provide players with a permanent offline copy of the game. As such, owners remain dependent on online servers to download their games, raising concerns about long-term accessibility.

In years past, physical games came with a “gold master”—a complete, offline version of the software printed on the disc or cartridge. Now, many publishers are opting for minimal content on physical media, a cost-cutting measure that sacrifices consumer rights and long-term usability. This shift has alienated collectors and gamers seeking the safety net that traditional physical games offer.

A comparison to other physical media trends

The challenges in the video game market mirror those faced by other forms of physical media. An article in the LA Times suggests DVDs and Blu-rays may be making a small comeback among Gen Z audiences. These younger consumers are reportedly seeking relief from the frustrations of subscription fatigue and choice paralysis associated with streaming services. Despite a 9% decline in sales in 2025, physical media formats like DVDs and Blu-rays seem to have finally slowed their steep annual drops from the early 2020s. Local rental stores in cities like Los Angeles are even reporting record membership gains.

Yet video games are not enjoying the same cultural resurgence. Unlike movies or music, games require a functional, long-term digital infrastructure that complicates preservation when publishers prioritize online locks or key-based systems. Even in the hardware-driven Nintendo ecosystem, game cards for the Switch 2 lack basic features like locally installable games, further limiting their appeal.

Category	2025 Trend	Physical Sales
DVDs/Blu-Rays	Slowing decline	Down 9%, improvement over prior years
Physical Video Games	Record low since 1995	$1.5 billion, down 11% year-over-year

Reasons for physical gaming’s decline

Several factors continue to erode the value of physical video games:

• Game key cards: Key cards are perceived by many players as incomplete products, reliant on external servers for game access. They undermine the offline functionality that was once guaranteed by physical copies.
• Lack of full builds: Many publishers now release games with only partial data on discs or cartridges. This necessitates large online downloads, reducing the utility of the physical version.
• Shift toward digital libraries: Platforms like PlayStation Network, Steam, and Xbox increasingly offer deep discounts and convenience to players, accelerating the migration away from physical media.
• Sporadic cultural support: Unlike vinyl records, which benefited from a long-term resurgence among audiophiles in the early 2000s, physical video games lack a similar groundswell of cultural enthusiasm.

The importance of offline builds

One of the most heated controversies in 2025 centered on publishers shipping incomplete game builds on day-one discs or cartridges. The launch of Crimson Desert reignited this debate after early physical copies turned out to require additional downloads to function fully. Critics argue that this shift undermines long-term ownership rights, potentially rendering the physical copy useless if a game’s servers are eventually retired.

Publishers defend the practice as necessary to meet deadlines, citing faster development cycles and the technical demand of creating a “gold master” version. While developers like Naoki Yoshida acknowledge that some limitations of physical media, such as slower asset streaming on game cards, mean more is required digitally, many gamers see this as a letdown. Without having a fully functional offline version, much of the appeal of physical media is lost.

Practical takeaways for consumers

For gamers still dedicated to physical media, here are some actionable insights:

• Collect wisely: Seek out discs or cartridges that include full offline builds whenever possible. Avoid game key cards unless it’s the only option.
• Support local businesses: If you’re fortunate enough to have a store or rental chain offering physical games, consider making purchases there to help maintain a niche industry.
• Weigh your priorities: While digital versions offer instant access, physical games preserve trading, lending, and resale rights, which can potentially save money over time.

Conclusion

Physical video game sales are in a precarious state, with spending declining year after year. Despite some stabilization in 2025 and pockets of renewed interest in physical media for films, video games have yet to find their bottom point. The reliance on game key cards and the absence of complete, offline builds are significant obstacles for collectors and traditionalists alike. While there’s still hope for a cultural shift, the current trends suggest a challenging road ahead for physical gaming enthusiasts.