US physical game spending rose 3% in May 2026, ending a 17-year slide

Rockstar Games just kicked off an online storm by saying physical copies of GTA 6 will not actually contain a disc at launch, instead using a code to download the digital version. That sounds like a final nail in the “boxed games” coffin. Yet the data point Mat Piscatella is sharing suggests the coffin lid is not totally locked yet.

Piscatella, a Circana senior director, reports that physical game spending in the United States grew year-on-year by 3% in the 12 months ending May 2026, the first such rise since the 2009 peak. It is a small move, but it matters because physical sales have been on a long decline. In other words, even while headlines are dominated by disc abandonment, the money moving through physical shelves briefly ticked upward. That creates a useful question for anyone funding, distributing, or strategizing around games: is this a turning point, or just a brief wobble before the trend continues?

To understand why this 3% figure is both interesting and not comforting, you have to look at what drives “physical” today. Piscatella’s read is blunt. “The overwhelming majority of volume is done digitally now,” he writes. That means the physical market is no longer the default channel for many players. It also means the physical category can move slightly due to timing, price mixes, retailer promotions, or the specific cadence of major releases, without changing the underlying consumer behavior that increasingly routes purchases to digital storefronts.

He also flags why collectors should not overinterpret the spending uptick. In his words, “The second hand market... doesn't really matter.” That is a big deal for boards and operators because secondhand ecosystems are often the emotional engine behind “ownership” debates, even if they do not necessarily translate to new revenue for publishers or to channel stability for retailers. If the secondhand market is not the lever, then the market’s future hinges on first-party, first-sale demand, and that is increasingly digital.

Piscatella adds another distribution-level reality check. More than half of all Xbox Series consoles in the US do not have a physical drive, while over a quarter of PS5s are similarly drive-less. Even when a product is sold “physically,” the hardware base determines whether physical media is usable as a true offline artifact. That matters for everyone from retail buyers to logistics planners to publishers thinking about how their launch formats land across households.

He also projects a timeline that should make decision-makers sit up. Piscatella says, “We likely have less than a decade left of physical software.” That is not a promise of collapse next quarter. But it is a strategic constraint: it implies that the market is approaching a terminal phase, where long-term investments in physical production, inventory depth, and channel-dependent launch planning become harder to justify. When you pair that with GTA 6’s plan, the pattern gets clearer. Disc-free “physical” packaging is not just a cost decision. It is a sign that the industry is already treating physical as a different kind of product, one that functions more like a retail voucher for digital delivery than as durable media.

For investors and executives, the second-order impact goes beyond where sales happen. If physical software shrinks toward near-endgame, it affects how game companies think about shelf strategy, retailer economics, and launch risk. Retailers may still stock high-profile releases, but their bargaining position and the operational playbook can weaken when the product no longer requires a disc and when consumers increasingly lack disc drives. There are also downstream effects on preservation narratives and the “share it in real life” behavior that collectors value, even if those cultural impacts do not show up cleanly in earnings calls.

There is still a commercial centerpiece here: GTA 6. The article notes analysts expect GTA 6 could sell up to 30 million copies at launch, though they are unsure if it can surpass the incredible longevity and massive sales of “5” in the long run. That uncertainty is the real stakes. A mega-franchise can temporarily mask channel decay, but it cannot change the physics of consumer hardware and purchase habits. So while the 3% spending rise in the 12 months ending May 2026 is a rare bright spot, the broader signal Piscatella points to is that digital dominance keeps tightening the lane for physical. For executives, the question is no longer whether physical can bump up occasionally. It is whether your business model assumes physical still has time left to matter, or whether you are already planning around a world where “physical” increasingly means packaging for a download.