Xbox shuts down physical game divisions

Xbox is reportedly shutting down departments responsible for the distribution of physical games, leading to speculations that Microsoft might fully transition to a digital distribution model. The decision is part of larger layoffs affecting 1900 employees across Xbox, Activision Blizzard, and Bethesda, as reported by a prominent journalist. This move aligns with a growing trend by Microsoft to shy away from physical releases as not all first-party titles have been released in physical form, such as Hi-Fi Rush, Psychonauts 2, and the forthcoming Senua's Saga: Hellblade 2. Recent leaks during the FTC case revealed possible new Xbox Series X models lacking a disc drive, suggesting a shift towards digital-only future. However, Microsoft may partner with external entities to manage physical game distribution for current-gen consoles.

Will the new Xbox model support physical media?

No, leaked documents regarding the new Xbox Series X model suggests it will not include a disk drive, indicating a shift towards digital-only games.

As background information, the move by Microsoft can be seen as part of a broader industry shift towards digital content distribution, echoing changes made by other gaming companies that increasingly prioritize digital sales. With game streaming services and the Xbox Game Pass subscription becoming popular, the reliance on physical media has decreased. The latest console hardware redesigns often come with considerations for cost reduction and consumer trends, leading to models without optical disc drives such as the Xbox Series S and potential future iterations of the Xbox hardware.