Major UK retailer Tesco has announced it will soon stop selling physical copies of games in its stores. The trend towards digital releases has been transforming the industry for some time and impacting physical game sales. Already in 2016, large series call of Duty saw a 50% decline in physical sales year-over-year, due in part to an increase in digital sales. Since then, the trend towards digital and away from physical sales has continued.
Back in January, a report revealed that physical game sales were down significantly compared to digital sales. It seems clear that this trend is not a temporary phenomenon and is putting pressure on retailers as they struggle to turn a profit on the physical inventory of games they carry. Now it seems that one retailer has simply decided to call it a day and stop offering physical games altogether.
In the UK, supermarket chain Tesco has announced it will stop selling physical games with immediate effect. While the company will continue to sell the games that are still available at its various locations, the company will not be restocking any titles. As a result, once the current deals have sold out, Tesco will no longer be selling physical games in stores.
Tesco locations will continue to carry cards to add money or points to various games, but that will be the extent of the company’s involvement in the gaming industry going forward. The retailer expressly cited the increase in digital sales as the reason for its decision, leaving no doubt about the growing importance of online trading in the gaming sector.
With digital sales rising and physical sales falling, it makes sense that retailers would start phasing out video games in stores. Games margins are quite limited for retailers and they take up quite a bit of shelf space that could be reserved for other products that are selling better and generating more revenue. It’s also not surprising that a UK company is taking the lead in this change. As recently as 2020, UK physical game sales were down 20% year-on-year, suggesting that retailers in the country would start to bid farewell to the product.
Tesco’s move also underscores the increasing pressure exclusive games retailers are facing, as it becomes increasingly difficult to get gamers to head to brick-and-mortar stores when most things they could want are just a download away. It’s no secret that many game retailers are struggling. The well-known company GameStop recently fired its CEO. As the shift to digital sales continues, more stores could be forced to adapt or exit the game sales business altogether.
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Source: Gaming Industry