PlayStation May Return to 12%+ Profit Margins Once Disc Production Ends, According to Analyst

Sony’s decision to stop producing physical game discs for new PlayStation releases in 2028 could end up doing more for the company’s bottom line than simply cutting manufacturing and shipping costs. A new analyst forecast suggests the move could give PlayStation’s operating margin a sizeable boost.

Goldman Sachs analyst Minami Munakata expects Sony’s Game & Network Services operating margin to rise by around three percentage points in FY2028 once the disc phase-out takes effect, which could put PlayStation back above the 12% mark.

PlayStation Could See a 3-Point Margin Boost After Discs End

As reported by Nikkei Asia (via TweakTown), Munakata expects Sony’s decision to end PlayStation disc production for new games to add around three percentage points to its operating margin in FY2028. Sony’s Game & Network Services segment recorded a 9.9% operating margin in FY2025 (via Sony), which would put Munakata’s estimate at roughly 13%.

That would take PlayStation back toward the margins it recorded during the pandemic. G&NS posted a 12.9% margin in FY2021 and 12.6% in FY2022, before dropping to 6.9% in FY2023 and then recovering to 8.9% in FY2024 and 9.9% in FY2025.

The timing is key here. Sony plans to stop producing discs for new PlayStation games in January 2028, making FY2028, which runs from April 2028 to March 2029, the first full fiscal year in which the financial impact of the shift can be properly measured. Much of that potential gain comes from removing the manufacturing, packaging, shipping, and retail costs tied to physical releases.

Sony is already heavily digital, too, with 78% of full PS4 and PS5 game units downloaded digitally in FY2025. With physical games now making up a much smaller share of sales, Munakata’s forecast suggests that removing the remaining disc business could give PlayStation’s profitability another substantial push.

Sony May Have Another Path to Higher PlayStation Margins

After all, why stop at 3%? | Credits: PlayStation/Sony

There is another part of the physical market that Sony could benefit from: resale. At present, a single game disc can pass through several players, with each person buying and selling the same copy without Sony earning anything from those later transactions.

Sony has not explicitly said that recapturing those sales is part of its reasoning, instead pointing to the industry’s continued shift toward digital content (via Kotaku). Still, it is an obvious consequence of the move. If those players eventually start buying digital copies instead, Sony gets more sales instead of having to watch the same disc circulate.

That could make the margin boost even more meaningful than simply cutting disc-production costs. The physical market has allowed games to keep changing hands long after Sony’s original sale, while digital purchases lock each new buyer into another transaction through the PlayStation Store.

Are you surprised by Munakata’s forecast for PlayStation’s margins, and what do you think about Sony ending physical game production in 2028? Let us know in the comments below!