Digital-only PlayStation: Is it ‘game over’ for the high street?

A whole host of reasons have been cited as to why the news has not gone down well with gamers. Issues surrounding ownership, licensing, online connectivity, the loss of a second-hand market and concerns over pricing power in a fully digital ecosystem have all featured prominently in the debate.

No more ‘physical pizzas’

The announcement has also led to some comical responses from major brands. Domino’s, for example, jokingly posted on X that it would cease production of physical pizzas and move to digital pizzas only. Customers would simply download a code and use their imagination to enjoy the pizza.

However, jokes aside, and beyond the concerns being raised by gamers and parts of the gaming industry, the announcement raises an important question about its potential impact on the real estate market – an aspect that is perhaps being overlooked.

What makes this particularly interesting is that it comes against the backdrop of continued efforts by policymakers to revive Britain’s high streets. Figures such as Greater Manchester Mayor Andy Burnham have consistently championed the regeneration of town centres, increased footfall and the creation of thriving local retail economies. Yet announcements such as this raise questions about whether some of the structural challenges facing the high street may be deepening rather than easing.

Firstly, let’s rewind a little.

Collapse of Blockbuster

Most people will remember the dramatic collapse of Blockbuster, which ultimately resulted in hundreds of store closures across the UK and thousands globally. The rise of digital streaming platforms such as Netflix fundamentally altered consumer behaviour, reducing demand for physical media and changing how people accessed entertainment.

One consequence was that large numbers of retail units became vacant. Landlords lost rental income, neighbouring businesses experienced reduced footfall and many former Blockbuster sites were eventually repurposed for alternative retail, leisure or food and beverage uses.

Now, it is perhaps not time to hit the same level of panic just yet. At this stage, only PlayStation has announced a move away from physical games. However, a few days earlier, Rockstar Games reportedly indicated that GTA VI would primarily focus on digital distribution. Whether this is simply coincidence or part of a broader industry direction remains to be seen.

Will Xbox and Nintendo follow?

The bigger question is whether Xbox and Nintendo could eventually follow a similar path. Whilst there is currently no indication that this will happen, it is undoubtedly a possibility that many within the industry will be watching closely.

One concern that transfers directly from the gaming market into the retail property sector is the future of second-hand games.

For decades, gamers have enjoyed the ability to trade games once they have finished with them, either for cash or credit towards new releases. GAME, now owned by Frasers Group, previously moved away from parts of the second-hand market and has increasingly integrated stores into existing Sports Direct and Frasers locations rather than operating as standalone shops. This strategy has already contributed to the loss of some dedicated gaming retail space.

CeX remains the UK’s largest specialist retailer of second-hand games, mobile phones and consumer electronics, with hundreds of stores across the country. Whilst the business is by no means reliant solely on PlayStation titles, PlayStation products represent a significant part of its inventory.

Effect on retailers

We may not witness disruption on the scale of Blockbuster’s collapse, but it is difficult to argue that there will be no impact at all. PlayStation remains the dominant console platform in many markets, and any substantial reduction in physical game sales is likely to affect retailers that depend upon them.

The impact on profitability across some businesses will certainly be felt and may, in time, lead to restructuring, store rationalisation or a greater focus on digital channels.

There must also be consideration given to independent gaming retailers. Industry estimates suggest there are several hundred specialist gaming stores operating across the UK, many of which stock both new PlayStation releases and second-hand titles.

All are likely to be affected in some way by PlayStation’s announcement.

Consequently, could we begin to see a rise in retail vacancies as some businesses struggle to adapt? It is too early to say with certainty, but it is a possibility that cannot be ignored.

PlayStation and high-street footfall

There is also the wider issue of footfall.

For the time being, Xbox and Nintendo do not appear to be heading in the same direction as PlayStation. Nevertheless, PlayStation commands a significant share of the gaming market. As a result, we could see fewer gamers visiting high streets, retail parks and shopping centres specifically to purchase new releases or trade existing games.

This is often overlooked. Reduced footfall to one store can create a knock-on effect for neighbouring businesses. A gamer who previously visited a shopping centre to buy a new release may also have purchased food, coffee or other retail items whilst there. If the primary reason for visiting disappears, some of that associated spending may disappear too.

Impact on industrial and logistics sectors

Furthermore, it is not just retail premises that could be affected. There are also the industrial and logistics sectors that support the manufacture, packaging and distribution of physical games. If physical production declines significantly, what effect could this have on warehousing and distribution space in the longer term?

We will continue to monitor industry reaction and what begins to unfold over the next 12 to 18 months as the sector prepares for the shift away from physical media.

Although the change will not formally take effect until 2028, there is a strong possibility that publishers will begin preparing well in advance, potentially accelerating the move to digital-only releases before then. As a result, some impacts may be felt much earlier than expected.

Consumer behaviour has undoubtedly been shifting towards digital channels for some time. However, if the initial reaction from gamers is any indication, the transition will not be universally welcomed.

Who will benefit?

There may also be beneficiaries. Increased digital consumption will require greater data storage, content delivery infrastructure and network capacity, potentially supporting demand for data centres and associated real estate.

That said, if other major gaming platforms eventually follow PlayStation’s lead, the implications for high streets, shopping centres and retail parks could become much more significant.

At a time when national and regional policymakers are seeking to reinvigorate town centres and drive people back to the high street, the last thing the retail sector needs is another large-scale source of potential vacancy risk.

Landlords, retailers and investors alike will be watching closely over the coming months to see what scale of impact this shift may ultimately have.

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