Game Over: Major Retailer Pulls Plug on Physical Game Sales

Tesco, a major UK retailer, has announced its decision to stop selling physical copies of games in its stores. The growing popularity of digital releases has been gradually impacting physical game sales for some time now. In fact, even as early as 2016, the renowned Call of Duty series experienced a significant 50% decrease in physical sales compared to the previous year, largely due to the surge in digital sales. Since then, the shift from physical to digital sales has only continued.

Earlier this year, a report highlighted a substantial decline in physical game sales compared to digital sales. It is evident that this trend is not just a passing fad, causing retailers to face challenges in generating profits from their physical game stock. In response, one retailer has made the decision to abandon physical games entirely.

Tesco, the supermarket chain in the UK, has recently announced an immediate halt to the sale of physical games. Although Tesco will proceed with selling the remaining games available in its different stores, it will not replenish its stock with new titles. This means that once the current offerings are sold out, Tesco will no longer offer physical games for purchase in its stores.

Tesco locations will continue to offer cards for adding money or points to various games, but this will mark the extent of the company's involvement in the gaming industry moving forward. The decision was explicitly attributed to the growing prominence of digital sales, leaving no doubt about the increasing significance of online commerce in the gaming sector.

With the rise of digital sales and decline in physical sales, it is logical for retailers to gradually phase out video games in their stores. Retailers face limited profit margins on games and allocating significant shelf space to them becomes less viable when compared to other products that yield higher sales and revenue. The leadership role taken by a UK-based company in driving this change is not unexpected either. In 2020 alone, physical game sales in the UK experienced a 20% decline compared to the previous year, indicating a natural inclination for retailers in the country to shift their focus away from this particular product.

This move by Tesco underscores the mounting challenges faced by exclusive game retailers as the convenience of downloadable content decreases the incentive for gamers to visit physical stores. The struggles experienced by game retailers are evident, as demonstrated by the recent dismissal of the CEO of GameStop, a prominent company in the industry. As the trend towards digital sales persists, more stores may be compelled to either adapt or withdraw completely from the game-selling business.