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The Business of Making Physical Video Games In 2025

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Publishing physical video games today comes with several challenges, especially in a digital-first era. Here are some of the most pressing issues:

🏭 Manufacturing and Supply Chain Issues

  • High Upfront Costs: Producing physical media (discs, cartridges, cases, manuals) requires bulk orders and hefty upfront investments.

  • Component Shortages: Limited availability of materials (e.g., chips for cartridges, plastic for cases) can delay production.

  • Manufacturing Delays: Nintendo Switch cartridges and PlayStation/Xbox discs often have long lead times and limited manufacturing slots.

📦 Distribution and Logistics

  • Shipping Costs: Global shipping rates are high, and fragile packaging means risk of damage or returns.

  • Warehousing: Storing unsold inventory is expensive, especially if a game underperforms.

  • Retail Shelf Space: Big-box retailers give priority to AAA publishers, making it tough for indie titles to gain visibility.

💸 Economic Viability

  • Lower Profit Margins: Physical editions come with production, shipping, and retail cut costs, reducing net revenue.

  • Sales Risk: Overestimating demand leads to unsold stock, while underestimating it can mean missing revenue.

📉 Consumer Trends

  • Digital Dominance: Many players prefer the convenience of digital downloads, especially with fast internet and pre-load options.

  • Decline in Used Game Sales: Services like Game Pass and PS Plus reduce demand for physical resale value.

🛡️ Anti-Piracy and Security Concerns

  • Copy Protection: Disc-based games are more vulnerable to piracy and require complex DRM solutions.

  • Preloading and Patching: Many physical games require large day-one patches, making them less “complete” than they used to be.

🌍 Environmental Impact

  • Eco Concerns: Plastic packaging, printing, and shipping create a larger carbon footprint than digital distribution.

🧑‍🎨 Design and Packaging Limitations

  • Less Room for Creativity: Limited physical space for manuals, inserts, or collector’s extras compared to digital extras like soundtracks, concept art, etc.

  • Localization Complexity: Different packaging and ratings (ESRB, PEGI, etc.) require multiple regional versions.

👥 Smaller Market for Indies

  • Barrier to Entry: Independent developers may struggle to meet minimum unit requirements or afford distribution deals.

  • Reliance on Specialty Publishers: Companies like Limited Run Games help, but they have long waitlists and niche audiences.